Australian dollar update 17/04/2012

[John From Moneycorp]

The Australian dollar was the week's second best performer, strengthening by a cent against the pound. All of that gain came on Thursday morning, following strong employment data.

It was not an especially fruitful week for Australian ecostats. Westpac's index of consumer confidence fell by -1.6% in April from 96.1 to 94.5 after an even bigger -5.0% fall in March. There were also back-to-back monthly falls for home loans; -2.5% in February after -1.1%. Inflation expectations among the public were higher in April at 3.3%, dimming hopes for lower interest rates (the Reserve Bank of Australia pays particular attention to expectations in its policy deliberations).

The corn-curer, however, was the employment report. Instead of rising as expected to 5.3%, unemployment was steady at 5.2%. The even better news was that employers hired a further 44.0k staff in March. The figure more than offset the previous month's -15.4k decline and blew away expectations of a 6k increase.

[John From Moneycorp]

The Australian dollar is continuing to remain weak.

 

This is due to weak US economic data released and news of a possible French credit rating downgrade – both these factors are negative for the Aussie and prompts risk aversion therefore investors don’t typically invest in the dollar.

 

Also, Australia’s export prices declined in the first three months of the year – this is a negative for the Aussie as it affects their all-important mining sector.