Reuters Australia
Aussie dlr extends loss on growing rate cut bets
Friday August 8, 11:49 AM
SYDNEY, Aug 8 (Reuters) - The Australian dollar was subdued near fresh four-month lows against a buoyant U.S. currency on Friday, weighed down by growing expectations of steep interest rate cuts in coming months.
* Near term bill futures YBAc1 surged and financial markets CSRBA=CSAU are almost fully pricing in a 50 basis points rate cut in September, the first reduction by the Reserve Bank of Australia (RBA) in seven years.
* A strong jobs report for July provided the Aussie some support on Thursday, but the central bank considers employment data a lagging indicator in a fast-slowing economy, so expectations of deep rate cuts were broadly unchanged.
* The Aussie dollar AUD= was at $0.9068/71, down from $0.9110/14 late here on Thursday and marginally off a four-month low of $0.9050 struck earlier in the session.
* The U.S. dollar extended gains after a surprise jump in U.S. June home sales. The home sales data offset a bleak U.S. jobless claims report.
* The U.S. dollar was also helped by comments from European Central Bank President Jean-Cluade Trichet who said he expects growth in the euro zone to weaken substantially this year, even though he sees inflation remaining above the ECB's target [ID:nL7650401].
* The Aussie traded near recent three-month lows against the yen AUDJPY=R, hurt by a renewed bout of risk aversion. Stocks on Wall Street fell after American International Group AIG.N suffered huge losses, fuelling fears of a further fallout from the credit crisis.
* Australian bonds were firmer on safe-haven inflows and expectations of domestic rate cuts. Yield spreads between two-year U.S. and Australian government bonds were at 346 basis points, not far from their lowest levels this year.
* Three-year bond futures YTTc1 were up 0.06 points to 94.21, while the 10-year bond contract YTCc1 added 0.07 points to 94.120. (Reporting by Anirban Nag; Editing by Wayne Cole)
Next Article: Aussie stocks fall 0.6 pct; Westpac gains
Previous article: Downturn to be felt in Australian office market
Top Headlines
Financial markets
Tuesday September 2, 12:20 PM - Newstalk ZB
To the markets where the NZX50 is up 12 points to 3,369. .. Read More
Zamia Gold Mines Limited's (ASX:ZGM) Anthony Molybdenum Discovery Expands Mineralisation And Project Potential
Tuesday September 2, 12:19 PM - Asia Business News
Brisbane, Australia, Sept 2, 2008 - (ABN Newswire) - Zamia Gold Mines Limited's (ASX:ZGM) diamond drill program at its Antho .. Read More
INTEREST RATE CUT AS AUSTRALIAN ECONOMY IS SLOWING: OPPOSITION
Tuesday September 2, 12:12 PM - Asia Pulse
Banking / finance Any interest rate cut later today will come at the cost of a slowing economy, opposition .. Read More
Calculators
Copyright © 2008 Yahoo! All rights reserved.
Yahoo!Xtra: A Yahoo!7/Telecom New Zealand Company.