Reuters Australia
Aussie dollar at 8-month peak vs yen, awaits data
Monday July 21, 12:07 PM
SYDNEY, July 21 (Reuters) - The Australian dollar was steady against the U.S. currency on Monday but soared to a eight-month peak versus the yen as easing worries about the financial sector encouraged investors to higher-yielding currencies.
* The Aussie rose to 103.99 yen AUDJPY=R, its highest level since the end of November, after appetite for risk received a boost on Citigroup's C.N. smaller-than-expected quarterly loss [ID:nN18431251]. The Aussie's gains against the U.S. dollar were checked by a sharp fall in commodities prices.
* By 9:35 a.m. the Aussie AUD= was at $0.9721/26 against the U.S. dollar, barely changed from Friday. It struck a 25-year high of $0.9851 on July 15, but has eased since after the U.S. dollar rebounded, commodity prices took a hit and the Reserve Bank of Australia's governor made dovish comments.
* The Aussie is expected to take a cue from second-quarter producer price index data due later in the day. Analysts expect a rise of 1.6 percent in the quarter, slowing from an increase of 1.9 percent in the previous quarter. For the year, prices are expected to have jumped 5.3 percent.
* The data could also give some clues about the consumer price index, which will be released on Wednesday. Financial markets are pricing in a roughly 30 percent chance of a rate cut in the next 12 months after dovish comments from the central bank, but an ugly inflation number could see those chances being pared.
* Currency speculators went long on the Aussie dollar, data from the Commodity Futures Trading Commission showed. Net long positions increased to 56,068 in the week to July 15 from 49,306 a week earlier [ID:nN18581992].
* Australian bond futures fell as safe haven inflows took a breather, tailing U.S. Treasuries which also dropped on easing credit concerns.
* The spread between the two-year Australian and U.S. government bonds yields widened to 441 basis points from 437 points at the end of last week.
* Three-year Australian bond futures YTTc1 fell 0.08 points to 93.47, while the 10-year bond contract YTCc1 lost 0.09 points to 93.565. (Reporting by Anirban Nag; Editing by Jonathan Standing)
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