Aussie Dollar Falls Before Fed Minutes on Bets Taper to Continue

The Australian dollar weakened versus its major peers amid speculation the U.S. Federal Reserve will continue to reduce stimulus that has buoyed asset prices around the world.

The Aussie held its biggest decline in three weeks against the greenback before minutes are released of the Fed’s meeting last month, when policy makers decided to begin tapering bond purchases. A gauge of construction activity in Australia declined in December, a report today showed. The nation’s currency traded near a five-year low versus its New Zealand counterpart.

Australia’s dollar fell 0.1 percent to 89.17 U.S. cents as of 11:04 a.m. in Sydney from yesterday, when it declined 0.5 percent. It was little changed at NZ$1.0774, extending yesterday’s 0.4 percent drop. It touched NZ$1.0733 on Dec. 18, a level unseen since October 2008. New Zealand’s currency weakened 0.1 percent to 82.76 U.S. cents.

San Francisco Fed President John Williams said yesterday quantitative easing will probably end this year if the recovery unfolds as expected. The central bank may reduce its purchases in $10 billion increments and end the program in December 2014, according to the median estimate of economists surveyed by Bloomberg on Dec. 19.

The Australian Industry Group’s construction index fell to 50.8 in December from 55.2 the previous month, according to a report today. Readings above 50 signal expansion.

(Source: Bloomberg)

Dollar Snaps Four-Day Advance on Services Report; Won Tumbles

The dollar fell for the first time in five days, ending its longest rally in two months, after a report showed services unexpectedly declined in December.

The euro climbed from a one-month low against the dollar as industry data confirmed the region’s services output expanded for a fifth month before the European Central Bank discusses interest rates on Jan. 9. South Korea’s won tumbled on bets the central bank will cut borrowing costs. South Africa’s rand gained after Moody’s Investors Service said the country will retain its investment-grade credit rating.

The Bloomberg Dollar Spot Index, which tracks the currency against 10 major peers, dropped 0.2 percent to 1,023.87 at 5 p.m. in New York after climbing to 1,029.67 on Jan. 2, the highest since Sept. 9. It completed a six-day rally on Nov. 1.

The dollar fell 0.3 percent to 1.3629 per euro after rising to $1.3572, the highest level since Dec. 5. The greenback slid 0.6 percent to 104.22 yen, while the Japanese currency advanced 0.3 percent to 142.04 per euro.

(Source: Bloomberg)

Aussie, Bond Yields Rise Before Trade, Retail Data This Week

Jalatama beritakan : Australia’s dollar advanced against all but one of its major peers before reports this week forecast to show the nation’s trade deficit narrowed and retail sales advanced for a fifth month.

Australian 10-year government bond yields were set for the highest close in a month following a rise in U.S. Treasury yields at the end of last week as the Federal Reserve prepared to pare asset purchases this month. Traders see 5 percent odds the Reserve Bank of Australia will reduce its benchmark lending rate from a record-low 2.5 percent at its next meeting in February, compared with an 18 percent chance a month earlier.

The Australian dollar added 0.4 percent to 89.81 U.S. cents as of 12:04 p.m. in Sydney from Jan. 3, and gained 0.4 percent to NZ$1.0857. Ten-year bond yields climbed five basis points, or 0.05 percentage point, to 4.40 percent, set for the highest close since Dec. 6.

New Zealand’s currency was little changed at 82.74 U.S. cents.

Australia’s trade deficit probably narrowed to A$300 million ($269.2 million) in November from A$529 million the previous month, according to the median estimate of economists surveyed by Bloomberg News before the Australian Bureau of Statistics data tomorrow. Retail sales advanced 0.4 percent in November, according to a separate Bloomberg poll before the report’s release on Jan. 9.

The Aussie gained for the first time in 11 weeks over the five days to Jan. 3, snapping the longest losing streak since 1982. It fell 14 percent against the greenback in 2013, the most among its Group of 10 peers after the yen.

(Source: Bloomberg)