Money Trading Blog

Dubai Debt Restructuring: Is It Enough?

2010-06-02T20:22:00.004+10:00

Dubai International Capital (DIC), the private equity unit of Dubai Holding, yesterday announced that they are looking to extend the maturities on some of their upcoming debt payments which came as a no surprise and it is unlikely to be the last time an UAE company will have to approach its lenders to ask for some latitude. Although Dubai World (DW) had come to a final agreement with its key creditors over the terms of its debt restructuring process, the company will still face considerable difficulty in meeting its future obligations.

DIC is seeking a 'three-month extension to 30 September 2010 of certain maturities' according to a company statement. The extension presumably applies to DIC's US$1.25bn loan maturing in June, although the company does have around US$2.6bn in debt overall which could also be affected. Although details are vague as yet, we would not be surprised if the company used the prospective three-month delay in order to negotiate a longer-term debt restructuring deal, similar to the one just hammered out by DW and its creditors.

Looking at the wider picture, Dubai's fundamental macroeconomic problems largely stem from the collapse in the domestic real estate market. Given that we expect demand for property in the emirate to remain subdued well into the medium term due to over supply of the properties, we consequently believe that over the coming years, many companies operating in the real estate sector are likely to struggle to generate sufficient operating cash flow (via sales) to pay back their borrowings on time. This analysis not only applies to real estate firms per se, but also to firms that are dependent on the Dubai real estate sector for their business. As such, investors are likely to remain extremely wary of any UAE company heavily exposed to the sector. Moreover, further requests for debt restructuring from other Emirati firms with either direct or indirect property market exposure are highly likely.

Traders continue to express anxiety over the developments in Europe

2010-05-24T21:02:00.001+10:00

U.S. stock futures point to a lower opening Monday morning as traders continue to express anxiety over the developments in Europe and the likely impact of the same on global economic recovery notwithstanding positive signs of economic growth at home. With the first quarter reporting season winding down, economic data related to existing home sales will be of interest in addition to the developments in global markets, including commodity prices and currency movements. The euro, which rebounded in the previous couple of sessions, has once again failed to hold onto gains and is presently trading weaker against the dollar.

Australian Dollar Rises After Jobless Rate Holds at 5.3%

2010-04-08T22:34:00.000+10:00

Australia’s dollar rose as a government report showed full-time jobs rose a seventh month in March, adding to the case for policy makers to extend the steepest interest-rate increases since 2000.

The gain in Aussie dollar was short lived as concern Greece may default on its debt damped investors’ appetite for riskier assets. The Reserve Bank of Australia raised benchmark borrowing costs on April 6 for the fifth time in six meetings and swaps traders are betting that 1 percentage point of further increases is likely over 12 months, according to a Credit Suisse AG index.

Australian Dollar Advances to 18-Month High on Policy Outlook

2010-04-07T16:03:00.000+10:00

The Australian dollar advanced to the highest level in more than 18 months versus the yen as the Bank of Japan kept interest rates near zero today, maintaining the yield advantage of the South Pacific nation over Japan.

The so-called Aussie also traded near a two-month high against the greenback and a record against the euro after a rate increase yesterday by the Reserve Bank of Australia added to the appeal of the nation’s assets. Gains in the Aussie against New Zealand’s dollar were limited after Fonterra Cooperative Group Ltd., the world’s largest dairy exporter, said milk powder prices reached a 21-month high.

AUD up on RBA rate rise to 4.25%

2010-04-06T18:58:00.000+10:00

THE Australian dollar gained in Asia trade today as the Reserve Bank of Australia's decision to raise interest rates for the fifth time in six meetings instilled confidence in the outlook for the Australian economy. Bond prices edged lower on the RBA decision, with short-dated bonds particularly weak.

In the first session following an extended Easter holiday weekend, traders were met with choppy action throughout the day. The Australian dollar looked to extend recent gains early in the day after being helped over the weekend by a better-than-expected US non-farm payrolls report that lifted more growth sensitive currencies around the world.

However, reports that Greece wanted to amend a recently signed agreement with the EU weighed heavily late in the morning. The local currency was also hurt during the morning by a growing feeling the RBA wouldn't hike its key cash rate in the afternoon, according to traders. That feeling proved to be incorrect, however, with the RBA raising its key cash rate 25 basis points to 4.25 per cent, leading to a rally in the Australian dollar against all major currencies.

Aussie consolidates above 0.9200 against US Dollar

2010-04-05T20:49:00.002+10:00

The Australian dollar showed mixed trading against its major rivals on Monday morning in Asia. Aussie rose to 87.18 against the yen at the start of Asian trading, the highest peak in more than 18 months, shed some of its gains later during the session. The aussie-yen pair moved sideways thereafter and is currently worth near last week's closing quote of 87.0.

The aussie that jumped to a 5-day high of 1.4654 against the euro & reversed its course thereafter. The euro-aussie pair is presently trading at 1.4694, above last week's closing quote of 1.4686.

The Australian dollar advanced to a 17-day high of 0.9221 against the US dollar and a 12-day high of 1.3058 against the NZ dollar from last week's closing values of 0.9195 and 1.3030, respectively. The aussie is currently quoted at 1.3056 against the kiwi and 0.9206 versus the greenback.

Technical - AUD/USD struggling with resistance at 0.9180/85

2010-04-01T21:40:00.000+11:00

Australian Dollar's rally from 0.9000 low last Friday, failed at 0.9210/15 aream , and the pair retreated yesterday to 0.9130. The Aussie has attempted recovery since although remains capped at 0.9180/85 area, while upside pressure eases.

In case of breaching 0.9180/85 (session high), next resistance levels lie at 0.9215 (Mar 30 high) and then 0.9250 (Mar 17 high). On the downside, support levels lie at 0.9130 (Mar 31 low), and below here, 0.9065 (Mar 24 low) and 0.9000 (Mar 25 low).

Australian dollar lower following worse than expected retail sales & building data

2010-03-31T17:48:00.002+11:00

from MoneyTrading.com.au

The Australian dollar lost its ground after worse than expected retail sales and building approvals data. Today’s data could potentially reduce the chances of an interest rate rise next week. Australian dollar was trading at 91.64 US cents, down from 92.06 US cents just before the data was released.

Australian retail trade at current prices fell 1.4 per cent in February to a seasonally adjusted $19.828 billion, from a downwardly revised $20.118 billion in January, the Australian Bureau of Statistics said. The median market forecast was for retail sales to have risen by 0.3 per cent in February.

Australian building approvals fell 3.3 per cent to 13,929 units in February, seasonally adjusted, from an upwardly revised 14,405 units in January, the Australian Bureau of Statistics said today.

NAB: Australian dollar to equal the greenback

2010-03-30T16:22:00.001+11:00

from MoneyTrading.com.au

Australian dollar will trade level with the US dollar in as little as three months, according to National Australia Bank, which said higher interest rates and commodity prices will lead to a sharp appreciation in the currency.

The bank said soaring prices for iron ore and coal would speed up the pace of economic growth and force the Reserve Bank of Australia to intervene with aggressive rate rises to prevent the re-emergence of inflation, The Australian Financial Review reports.

The Australian dollar rose as high as US93¢ in January but has since slipped back to around US90.5¢.

But NAB said the increasingly upbeat outlook for the economy and the prospect of rising interest rates would lift the currency to parity with the US dollar in three to six months.

The upbeat forecast matches a similar call by JPMorgan, which predicts the currency can trade equal with the US dollar within months.

RBA, China boosts Australian dollar

2010-03-29T23:13:00.002+11:00

from MoneyTrading.com.au

The Australian dollar advanced on Monday after the Reserve Bank of Australia sounded a hawkish warning over interest rates. Glenn Stevens, RBA governor, said Australian interest rates had been too low and warned it would not be ”wise to leave interest rates down at rock bottom” any longer than was necessary. Underlining the RBA’s growing discomfort with rising house prices, Mr Stevens warned people against thinking they could get rich by speculating on rising property prices.

The comments heightened expectations that the RBA would raise interest rates further at its policy meeting on April 6. The central bank has raised rates four times since October, taking its main lending rate to 4 per cent.

Also boosting the Australian dollar and other commodity-linked currencies, were bullish comments from Yu Bin, a Chinese government economist, who said growth in China could be as high as 12 per cent in the first quarter

Australia Dollar bounces on hawkish RBA

2010-03-25T21:37:00.003+11:00

from MoneyTrading.com.au

The Australian dollar bounced from lows on Thursday lifted by hawkish remarks from the Reserve Bank of Australia (RBA) that confirmed further rises in domestic interest rates. The Australian dollar tested the support levels at 0.9066 USD before reaching 0.9121 after RBA Assistant Governor Philip Lowe said rates here should continue to rise toward more normal levels.

So upbeat was Lowe on Australia's economy that he said the Australian dollar is expected to be higher than the average of the past decade. Implied rates show investors are priced for a 55 percent chance of rates rising to 4.25 percent in April, from 4.0 percent now. Over the next 12 months, another 124 basis points of rate rises are seen.

Australia Dollar lower following weaker motor vehicle sales in February

2010-03-22T20:17:00.000+11:00

from MoneyTrading.com.au

The number of new motor vehicle sales in Australia slipped a seasonally adjusted 1.9% in February compared with the previous month, official data showed on Monday.

The Australian Bureau of Statistics said in a report that there were 85,035 such sales during the month. Sales fell 3.5% in January.

According to the Sydney Morning Herald, economists say an 8.6% drop in sales of new commercial vehicles – which were included in the category of "other vehicles" – was the result of the Australian government's removal of a tax break for business investment.

In the wake of the report, the Australian dollar slid against its U.S. counterpart, with AUD/USD falling 0.33% to hit 0.9124.

Australian Dollar rises ahead of Fed meeting following RBA's minutes

2010-03-16T17:41:00.002+11:00

from MoneyTrading.com.au

The Australian dollar bounced from the day's lows on Tuesday aided by expectations of rising local interest rates and by a weaker US dollar ahead of a Federal Reserve policy meeting.

We are expecting the US central bank to say it wants to keep rates near zero for an "extended" period. The Australian dollar was initially pushed to the day's lows in a knee-jerk reaction to minutes of the Reserve Bank of Australia's (RBA) March policy meeting, which pointed to local rates rising gradually towards normal levels.

Some traders had thought the use of the word "gradually" meant the RBA was not as hawkish as before, but most analysts disagreed. They said the minutes showed the RBA still sees further rate rises as necessary, although bets on an April rate move would be a close call.

Dubai World lenders may accept extending the maturity of debt

2010-03-13T19:13:00.002+11:00

from MoneyTrading.com.au

Dubai World's creditors have rejected the idea of taking a "haircut" on $22 billion of debt with preliminary discussions shifting towards extending the maturity of existing loans and bonds, bankers familiar with the matter said. Dubai World has agreed to keep paying interest on the debt and to reschedule maturities of the principal as local banks are not in a position to handle any losses on their exposure to Dubai World.

It was feared that Dubai would try and force creditors into taking a 40% "haircut" on their exposure to Dubai World but these initial discussions were universally rejected by lenders, the bankers said.

Uncertainty over the outcome of talks between creditors and Dubai World regarding $22 billion of debt, that's equal to almost half the U.A.E.'s estimated oil revenue last year, has weighed on the emirate since November when the need to restructure was first announced.

The last week has seen representatives of Dubai World hold informal meetings with creditors in London and Dubai as both sides edge towards a deal. A spokesperson on behalf of Creditors stated that the restructuring has entered the final phases and they agreed on the terms and now have to discuss it with the other banks. Major creditors are hopeful that the terms of formal deal will be made public next week.

Disappointing new jobs number sends Australian dollar lower

2010-03-11T23:32:00.000+11:00

from MoneyTrading.com.au

The number of unemployed people rose by 10,700 to 615,900 in February, while the number of employed rose slightly by 400 to 10.971 million, the ABS reported. The rise in employment came thanks to an increase in full-time employment, which was offset by a decrease of 11,000 people in part-time employment, the ABS said.

But number of jobs created came in below market expectations. Australia's employment data showed the creation of 400 jobs versus expectations of 15,000. Just prior to the release, the Australian dollar was trading around 0.9145USD before falling to a low of 0.9115USD.

Commodity gains drive Australian shares, dollar higher

2010-03-08T19:27:00.000+11:00

from MoneyTrading.com.au

The Australian share market is continuing to gain ground after a positive lead from Wall Street and a rise in commodity prices. The market has also benefited from a $3.3 billion takeover offer for Arrow Energy by Royal Dutch Shell and PetroChina.

Arrow's shares were more than 45 per cent higher at $5.06 by 1:38pm (AEDT). The All Ordinaries Index was up 1 per cent at 4,820 just after 1:30pm, and the ASX 200 was up 43 points to 4,810. Firmer prices have pushed the gold miners higher, Lihir Gold was up 1.4 per cent at $2.95 and Newcrest has added 27 cents to $34.24.

The two biggest miners on the local market, BHP Billiton and Rio Tinto, have also climbed more than 2 per cent. And the Australian dollar has jumped almost a full cent from Friday's close to 91.10 US cents.

ECB, BOE To Hold Key Rates; More Exit Measures Expected

2010-03-04T21:20:00.000+11:00

from MoneyTrading.com.au

European Central Bank will most likely hold its interest rates unchanged for another month and may announce new measures related to gradual exit from monetary stimulus.

The nine member monetary policy committee of the Bank of England is also expected to leave the key interest rate unchanged at 0.5% and to keep on hold its GBP 200 billion asset purchase programme as they did in February.

Australian Dollar Falls From Week High on RBA Inflation Outlook

2010-03-02T22:01:00.002+11:00

from MoneyTrading.com.au

The Australian dollar fell from a one-week high as the central bank said inflation would likely be “consistent” with its target this year, suggesting it may slow the pace of interest-rate increases.

Australia’s currency traded at 89.90 U.S. cents as of 4:06 p.m. in Sydney, after reaching as high as 90.31 cents following the rate decision, from 90.09 cents in New York yesterday. The currency traded at 80.36 yen from 80.30 yen.

Australian Dollar rises on hopes Greece will be rescued

2010-03-02T00:42:00.000+11:00

from MoneyTrading.com.au

The Australian dollar rises for a second consecutive day amid hopes that the European Union was close to announcing more concrete measures to deal with the sovereign debt problem in Greece, despite mixed data about the current account and business indicators.

The US dollar fell against the euro on Friday, after reports suggested the German government might organise help for Greece. The greenback's fall contributed to substantial gains for oil, gold and copper prices, which flowed through to Australian resources and energy stocks.

Traders were awaiting US economic data, including the ISM manufacturing index due out overnight, while the Reserve Bank of Australia board is expected to increase the overnight cash rate to 4 per cent.

Euro reprieve after a heavy week

2010-02-27T19:10:00.000+11:00

from MoneyTrading.com.au

Although the Greek sovereign fears remain close to hand, the forex market is a little calmer to end the week as dealers move to lighten the load a little wrapping up profitable short positions against the euro.

In a day in which inclement weather has largely closed Manhattan due to heavy overnight snowfalls, there is a lack of impetus to take further bets in favor of the dollar especially in light of some tepid economic data of late, which in a sense provides a reprieve for the euro.

Meanwhile an upward revision to fourth quarter GDP growth is providing some respite for the dollar. Growth came in at 5.9% after an initial reading of 5.7%.

Euro – The euro is coming back from a hosing on Thursday when it hit a one-year low against the Japanese yen. Dealers are reportedly buying the euro at the end of the week with a real lack of fresh news that would justify taking further risk aversion bets. A weak GDP report from Britain saw dealers ditch sterling in favor of the euro, which gives the appearance of a more robust euro rebound today. Still, those gains are real and the euro is on a roll to end the week. Against the dollar the single currency buys $1.3570 ahead of Friday morning data for the U.S.

Aussie dollar – Despite its physical distance from Greece, the Australian economy continues to feel the weight of the fiscal challenges weighing on the Eurozone. The impact remains one of Aussie dollar avoidance as Greek fiscal situations and its entourage in terms of potential ratings upsets grips traders’ attention. Overnight the Aussie slumped to as low as 88 U.S. cents before moving back to 88.96 in early New York trade. Next week the RBA decides on whether to lift interest rates for a fourth time and is quite likely to move to 4%. The current degree of risk aversion is weighing heavily on the Aussie possibly in part because of the drama surrounding the sharp decline in the euro. The further the single European currency slides, the greater attention it draws to the potential for a sharper slowdown in global growth.

US Dollar Gains Ground On Stronger US Economic Data

2010-02-18T06:50:00.000+11:00

from MoneyTrading.com.au

US dollar continued its rally on Wednesday morning in New York, hitting a two-week high against the yen, after stronger U.S. economic data fueled bets the Federal Reserve will tighten monetary policy sooner than previously anticipated.

The dollar jumped to the highest level since Feb. 3 against the yen, rising as high as Y91.12. Demand for the greenback pushed the euro well below the $1.37 level, on the back of data that showed that U.S. housing starts in January climbed to the strongest level since July 2009, while industrial production beat analysts' estimates.

Australian Dollar jumps on Employment- Economy added 52,700 Jobs in January.

2010-02-12T00:24:00.000+11:00

from MoneyTrading.com.au

The Australian dollar surged as strong jobs data revived talk of a rate rise as early as March. The Australian dollar rose more than 1% against the dollar and the yen, getting a lift from data showing a bigger-than-expected rise in Australian employment in January and a fall in the jobless rate to an 11-month low.

Australian Bureau of Statistics reported today that the country’s unemployment rate declined 0.2 percentage point to 5.3% in January, an 11-year low. The number of people employed rose 52,700 to 10.966 million in the period, the largest increased in employment since December 2006.

AUD/USD last traded at 0.8884, facing resistance at 0.8910. We are Long AUD/USD, EUR/USD.

Australian Dollar Up as traders speculate further rate rise

2010-02-09T19:06:00.000+11:00

from MoneyTrading.com.au

The Australian dollar closed higher as risk appetite improved and traders continued to speculate about further interest rate rises in Australia and funding assistance for Greece.

At 1700 AEDT, the Australian dollar was trading at $US0.8686/91, up 0.25 per cent from Monday's close of $US0.8664/66.

From 0700 AEDT, the local unit traded between $US0.8615 and $US0.8704. At 1600 AEDT, the RBA's trade weighted index (TWI) was at 67.8 points, up from Monday's close of 67.7.

RBA Says Economy to Accelerate Even as Rates Increase

2010-02-05T13:42:00.000+11:00

from MoneyTrading.com.au

Australia’s central bank said economic growth will continue to accelerate this year even if policy makers are forced to raise the interest rate by another three quarters of a percentage point.

The economy will be growing at an annual pace of 3.25 percent in the three months through December 2010, up from 2 percent last quarter, the bank said today in Sydney. Officials based their forecast on an assumption that the overnight cash rate target will climb to 4.5 percent this year, in line with market estimates.

Australian Dollar Drops After Reserve Bank Unexpectedly Leaves Rates On Hold

2010-02-02T16:00:00.002+11:00

from MoneyTrading.com.au

The Australian dollar dropped after the central bank unexpectedly left rates unchanged, ending a record set of interest-rate increases. Reserve Bank of Australia Governor Glenn Stevens’ decision to keep benchmark borrowing costs unchanged at 3.75 percent wasn’t forecast by any of the 20 economists in a Bloomberg News survey. Australia’s business confidence fell in December to the lowest in six months, a private report showed today, a sign the bank’s previous three straight increases are damping sentiment.

Australia Inflation jump by 0.5% against expected 0.4%, likely event of Feb Rate Rise

2010-01-27T12:02:00.000+11:00

from MoneyTrading.com.au

Australia's inflation rate picked up in the December quarter, adding to the likelihood of a rate hike next week. The consumer price index rose by 0.5 per cent in the three months to December, the Australian Bureau of Statistics said. Economists had been expecting a 0.4 per cent gain for the quarter. Inflation on an annual basis rose 2.1 per cent, also slightly more than the 2 per cent pace expected by analysts. The Aussie dollar rose on the news as investors bet the chances of another rate rise by the central bank had increased in light of the inflation figures

Aussie Dollar well supported in anticipation of a fourth consecutive interest rate rise in February.

2010-01-25T13:15:00.002+11:00

from MoneyTrading.com.au

We are waiting for the consumer price index on Wednesday to be announced at 11:30am. With no market data due during the rest of Monday's domestic session before Tuesday’s Australia Day holiday; Aussie Dollar may be trade a tight range.

The median market forecast of the CPI is for prices to have risen by 0.4 per cent in the December quarter of 2009, for an annual rate of 2.0 per cent. The CPI measures inflation, which is the focus of the RBA's monetary policy.

Economists have all but locked in a 25 basis point rate rise in February, a move that would be the RBA's fourth in as many meetings and take the official benchmark interest rate to four per cent.

Market plunges on Obama bank crackdown

2010-01-22T08:46:00.000+11:00

from MoneyTrading.com.au

Stocks on Wall Street plunged overnight after US President Barack Obama announced plans to limit the size and power of American banks. In a very public swipe at Wall Street, Mr Obama blamed banks for sparking the worst economic crisis since the Great Depression and said common sense reforms were needed.

Wall Street gave an immediate –ve reaction to the plan, with the Dow Jones industrial index sinking 2 per cent as the president delivered his announcement.

Mr Obama says the financial system is far stronger today than it was a year ago, but is still operating under the same rules that led to its near-collapse. Now he wants to ban banks from proprietary trading operations, where a firm makes bets on financial markets with its own money.

"Banks will no longer be allowed to own, invest or sponsor hedge funds, private equity funds or proprietary trading operations for their own profit, unrelated to serving their own customers," he said. "These firms should not be allowed to run these hedge funds and private equities funds while running a bank backed by the American people."

The plan is the latest attempt by the White House to harness popular anger at massive Wall Street bonuses and tight credit markets as Congress heads to a crucial election year.

Australian Dollar Advances on China Growth

2010-01-21T16:47:00.000+11:00

from MoneyTrading.com.au

The Australian dollar advanced after a government report showed China’s fourth-quarter growth rose at the fastest pace since 2007, damping concerns of a slowdown in Asia’s second-largest economy.

China’s economic expansion is bullish for the Australian dollar over the medium term and for commodity prices.

Australian Dollar Slides on Chinese Caution & US Housing Strength

2010-01-21T09:28:00.002+11:00

from MoneyTrading.com.au

US Dollar has been strengthened by two drivers: (1) the credit downgrades of Greece and Spain (and potentially Ireland, all three European Union members) along with cautious Chinese Credit Approach and (2) the surprisingly strong U.S. economic data streaming substantiating the increased probability of the Fed staging an earlier withdraw of monetary stimulus than markets had expected.

We are looking for fundamentals to shape up the currency market direction in the immediate term.

Aussie Consumer sentiment jumps 5.6%: Likely increase of Interest Rates on 2nd Feb

2010-01-20T12:43:00.000+11:00

from MoneyTrading.com.au

Three consecutive rate rises have done little to hurt consumers, with sentiment rising by 5.6% in January to 120.1 points, according to the latest Westpac-Melbourne Institute consumer sentiment survey.

The index rose from 113.8 points to 120.1 in January, with Westpac chief economist Bill Evans saying the result is above the level recorded in September before the Reserve Bank of Australia began to raise interest rates.

We expect to see another rate hike of 0.25% to be announced by the RBA on 2nd Feb.

Australian dollar - Consumer Confidence in focus

2010-01-20T09:58:00.000+11:00

From MoneyTrading.com.au

The Australian dollar bounced back slightly against the U.S. dollar overnight, though technical factors and unease ahead of global economic data due later in the week could keep the lid on the commodity currencies.

We are looking forward to Australian consumer confidence data from Westpac and U.S. housing starts data on Wednesday for further direction.

A strong consumer confidence and weak (U.S.) building approvals could see the Aussie breaking above 0.9280 against USD.

Westpac Consumer Confidence is due at 10.30am

Australian dollar climbs on thin US holiday trade

2010-01-19T09:13:00.001+11:00

from MoneyTrading.com.au

We are more focused on the release of China's gross domestic product data for the December 2009 quarter on Thursday, which would be a good gauge of the Chinese economy. China is Australia's largest export market. A solid robust pace of Chinese Economy will help underpin the Australian dollar.

Australian dollar UP on job data

2010-01-14T12:40:00.000+11:00

from MoneyTrading.com.au

The Australian dollar jumped to a high of $0.9290 after employment figures blew past expectations for a fourth straight month in December, while the jobless rate surprised by falling to an eight-month low, adding to the case for a further increase in interest rates next month.

The local currency jumped a third of a cent and bill futures slid as the market priced in a greater chance of a rate hike at the Reserve Bank of Australia's (RBA) next policy meeting on February 2.

The Australian dollar was $0.9245 before the data was released.

Australian Dollar steady ahead of Job data

2010-01-14T09:04:00.000+11:00

from MoneyTrading.com.au

The Australian Dollar recovered from yesterday’s losses ahead of the Unemployment data due to be released at 11:30 AEDST. The report is expected to show that employers have added jobs for the 4th consecutive month. Economists expect 10,000 jobs were added the previous month.

It appears that the fundamentals supporting the Aussie’s growth remain strong, as positive economic data continues to be published even as the Central Bank continues to raise interest rates. Long term trend for the AUD continues to remain optimistic.

The AUD last traded at 92.43 U.S. cents. We continue to hold our long AUDUSD at 91.40 US cent.

Aussie opens lower after Chinese Central Bank reserve raised

2010-01-13T09:40:00.002+11:00

from MoneyTrading.com.au

The Australian dollar opened lower after China unexpectedly raised the proportion of deposits that banks must set aside as reserves, leading to falls in gold and commodity prices. The Australian dollar was trading at 0.9204USD last. During the offshore session, the Australian dollar traded between 0.9189 USD and 0.9307 USD.

China raised the proportion of deposits that banks must set aside as reserves to cool the world's fastest-growing major economy as a credit boom threatens to stoke inflation and create asset bubbles. Reserve requirements will increase by 50 basis points from January 18, the central bank said. That move was expected at some point, but probably it occurred a bit earlier than what the market factored in, and as a result we saw concerns raised about a tightening in Chinese monetary policy and whether that will slow Chinese growth and slow demand for commodities.

Dollar dips as housing finance disappoints.

2010-01-12T13:31:00.000+11:00

from MoneyTrading.com.au

The Australian dollar was lower today after the release of worse-than-expected housing finance figures.

At midday, the Australian dollar was trading at 92.7 US cents, down from yesterday’s close of 93.11 US cents. Australian housing finance commitments for owner-occupied housing fell 5.6 per cent in November. Economists had expected the number of owner-occupier housing finance commitments to have fallen by 0.5 per cent in November.

Following weak US Job data, Australian dollar soared on the back of strong export numbers from China.

2010-01-11T15:59:00.000+11:00

from MoneyTrading.com.au

During the thin trading conditions with Tokyo shut for a holiday, We expect the greenback to stay on the defensive as speculators cut long positions in the U.S. dollar following the U.S. jobs report. Data on Friday showed U.S. employers cut 85,000 jobs last month. November payrolls, however, were revised to show the economy actually added 4,000 jobs.

Interest rate futures pared expectations the Fed will raise benchmark short-term rates any time soon. July futures contract implied a 22 percent chance of a rate hike by mid-2010, down from around 40 percent before the jobs data.

The U.S. dollar's next litmus test is expected to come from U.S. earnings season which kicks off in earnest this week, U.S. retail sales, industrial production and inflation data.

The European Central Bank will also meet on Thursday and is largely expected to keep rates unchanged.

The Australian dollar rallied to a 26-month high versus the euro, rising to as high as 0.6442 euros. The Aussie also struck a fresh five-week high of $0.9318 buoyed by strong Chinese export numbers.

The Aussie was also bolstered by a rise in gold prices. Spot gold rose to a five-week high early on Monday.

We have our AUDUSD Long at 0.9142 still open.

Friday's US employment figures in focus

2010-01-07T09:25:00.000+11:00

from MoneyTrading.com.au

The Australian dollar was higher against both the U.S. dollar and yen Tuesday, bolstered by strong overnight buying as gains in metals prices and a surge on Wall Street spurred fresh appetite for risk. We are caution ahead of the release of US employment figures to be released on Friday.

We are long on AUD against USD & EUR.

US Dollar weaker Broadly On Positive Global Data

2010-01-05T08:54:00.002+11:00

From MoneyTrading.com.au

The dollar's end-of-year strength continued to fizzle on Monday, the first day of active trading for 2010, as strong global manufacturing data painted a rosier economic picture, leading investors to buy riskier assets.

The dollar declined against the euro, yen and most of its major rivals, dropping sharply against commodity-linked currencies, such as the Australian dollar, as stocks and commodities posted big gains into the afternoon session.

Gold was up nearly 2%, while silver was up 3.5%.

Australian Dollar Supported By China Manufacturing despite local wakness

2010-01-04T13:46:00.000+11:00

MoneyTrading.com.au - Wish you all a Happy & Prosperous New Year

Australian stocks are taking some comfort Monday from continued evidence of the strength of China's economy, beginning 2010 on a positive note despite a weak lead from the U.S. and a contraction in local manufacturing.

Australian manufacturing activity fell slightly in December, snapping a run of four consecutive monthly rises, suggesting a strong Australian dollar, recent interest rate rises and a weak global economy had a weak impact on activity.

The Australian Industry Group/PricewaterhouseCoopers Australian Performance of Manufacturing Index fell 2.7 points in December to 48.5, below the 50-point level that separates contraction from expansion.

New Zealand Posts Current Account Surplus For First Time In 20 Years

2009-12-22T23:29:00.002+11:00

@ MoneyTrading.com.au

New Zealand recorded a seasonally adjusted current account surplus of NZ$340 million in the September quarter - the first such surplus since December 1988.

The surplus is a NZ$746 million turnaround from the June quarter deficit of NZ$406 million, Statistics New Zealand said on Tuesday. The change in the current account balance from a deficit to a surplus was mostly due to a narrowing of the investment income deficit.

Japan Posts Y373.9 Billion Trade Surplus In November

2009-12-21T19:11:00.002+11:00

Japan saw a merchandise trade surplus of 373.9 billion yen in November, the Ministry of Finance said on Monday. That was better than forecasts for a surplus of 300 billion yen following the revised surplus of 805.4 billion yen.

Fed Keeps Rates Unchanged

2009-12-17T08:36:00.002+11:00

From: MoneyTrading.com.au
U.S. stocks were up slightly after the FOMC's statement, but later reversed to near unchanged. The dollar rallied, hitting an intraday high against the euro and yen but later pared gains. Long-dated U.S. Treasurys erased earlier gains on the news, while the two-year note got a boost.

Australian Dollar continues to slide following worse than expected GDP growth; RBA hints at rate-hike pause

2009-12-16T14:47:00.004+11:00

From: MoneyTrading.com.au
Australia’s economy expanded at half the forecast pace in the third quarter and Reserve Bank hinted that it may pause in the pace of interest rate hikes.

Australian gross domestic product grew 0.2% in the three months ended Sept. 30, according to the Australian Bureau of Statistics. That’s below the 0.4% pace forecast by economists. A drop in net exports partly offset a 0.7% increase in household spending and a 6.2% gain in public investment, the figures showed.

Battellino said monetary policy is “back in the normal range” as business and home loan rates have increased at a faster clip than the RBA has hiked the overnight cash rate target. The comments prompted traders to cut bets on a fourth increase in the benchmark rate any time soon, after the central bank’s three increases in as many months. The Australian Dollar was traded just under 90 US cents.

Stronger USD amid Fed Meeting & Stronger Data

2009-12-16T08:53:00.000+11:00

The US Dollar rose on back of strong U.S. economic data in recent weeks, which in turn has raised optimism that the Fed Reserve could tighten monetary policy sooner than anticipated. The optimism was further strengthened on Tuesday after the release of stronger-than-expected industrial production data for November.

The dollar jumped Tuesday to a 10-week high against the Euro amid signs that the U.S. economy may be picking up steam ahead of countries in the Euro zone.

Expectations the Federal Reserve could acknowledge a rosier outlook for the U.S. economy at the conclusion of its two-day rate-setting meeting Wednesday also underpinned the greenback.

Dubai Gets $10B From Abu Dhabi; To Pay Nakheel Bond

2009-12-14T16:41:00.002+11:00

Dubai said Monday that it has received $10 billion in financing from Abu Dhabi, which will pay part of the debt held by conglomerate Dubai World and its property unit Nakheel.

Today Dubai faces $3.5 billion debt hurdle

2009-12-14T09:21:00.002+11:00

Dubai's stock market did soar for a second consecutive session on Sunday as traders reacted to a surge in Nakheel's bond price last week on mounting speculation it will repay.

Analysts have speculated Nakheel could repay its bond at 70 cents to a dollar and issue new debt for the remainder; a Win-Win situation.

Technical default by Nakheel today could lead to another sell off.

US stocks gain as jobless claim substantiates recovery

2009-12-11T09:22:00.000+11:00

US stocks rose as the average number of jobless claims fell to a one-year low and the trade deficit unexpectedly shrank as a weaker dollar boosted exports.

Oracle gained 3 per cent after Goldman Sachs Group increased earnings estimates. Coca-Cola climbed to a 19-month high as Costco Wholesale Corp. said it will resume stocking its products. Walt Disney Co. reached the highest level since September 2008 after Sanford C. Bernstein increased its share buyback estimate for fiscal 2010.

Australian markets are poised for gains. In recent trading, the SPI 200 futures index was up 34 points to 4648 points. Yesterday, the benchmark S&P/ASX200 index ended down 31.2 points, or 0.7 per cent, at 4606.7 points, while the broader All Ordinaries index fell 29.7 points, or 0.6 per cent, to 4622.9 points. The Australian dollar was holding on to yesterday's gains. It was recently buying 0.9270 USD & 80.80 yen.

Blogger @ MoneyTrading.com.au

Dubai – Reality or Illusion? Is Sheikh Mohammed going to rescue Dubai?

2009-12-09T22:19:00.000+11:00

Moody’s Investors Service downgraded six Dubai entities. Emaar Properties PJSC, the United Arab Emirates’ biggest developer, plunged to the lowest since July after it was cut by Moody’s. Emirates NBD, the U.A.E.’s biggest bank by assets, tumbled to 3.42 dirhams. JPMorgan cut the stock from “overweight” and assigned a 12-month price estimate of 3 dirhams. The DFM General Index has lost 27 percent since the emirate on Nov. 25 said Dubai World is seeking a “standstill” agreement on its debt.

Bonds of Dubai’s state-controlled companies tumbled to record lows yesterday signaling growing concern that borrowers will fall behind on debt payments. State-owned Dubai World is seeking to restructure $26 billion of debt. Nakheel PJSC, the company’s property unit, posted a first-half loss of 13.4 billion dirhams ($3.65 billion).

Dubai Holding LLC is most at risk of being “next in line” in restructuring its debt, Barclays Plc said. Istithmar, Dubai World’s investment arm, lost control of the W New York Union Square hotel yesterday in a foreclosure auction after investing in the property near the top of the real estate market. Dubai Group LLC, an investment company owned by the emirate’s ruling Sheikh Mohammed Bin Rashid Al Maktoum, is seeking to sell a $91 million stake in EFG-Hermes Holding SAE, the biggest publicly traded Arab investment bank, according to two people familiar with the sale.

Emaar lost 9.9 percent to 2.56 dirhams, the lowest level since July 23. Emaar and the five other companies were cut after Moody’s said recent comments by Dubai government officials indicated the businesses didn’t have state backing. Moody’s reduced Emaar two notches to B1 from Ba2.

Can the Ruler save Dubai or will Dubai just sink?

AUDUSD & EURUSD positions are left opened at current levels

2009-12-09T07:37:00.000+11:00

We short AUD at 0.9103 USD & EUR at 1.4796 USD

Investors raised bets on US interest rate

2009-12-07T09:26:00.000+11:00

Investors raised bets on US interest rate after the world’s biggest economy shed the least jobs in November since the recession began. Australia’s dollar fell the most in a week as debt offers over similar U.S. Treasuries narrowed to the smallest in two months. Futures traders raised to 30 percent the probability of a change in the Federal Reserve’s target rate in April from 18 percent a week earlier, according to Bloomberg data.
Benchmark interest rates are 3.75 percent in Australia and 2.5 percent in New Zealand, compared with 0.1 percent in Japan and as low as zero in the U.S., attracting investors to the South Pacific nations’ higher-yielding assets. The risk in such trades is that currency market moves will erase profits.

Payrolls in U.S. Decline by 11,000 against estimate of 125,000

2009-12-05T01:10:00.000+11:00

Employers in the U.S. cut the fewest jobs in November since the recession began and the unemployment rate unexpectedly fell, signaling the recovery is lifting the labor market out of the worst employment slump in the post-World War II era.

WOW! Unprecedented volatility following US Unemployment

2009-12-05T01:06:00.000+11:00

We booked 78 pips and 48 pips on AUDUSD and EURUSD. We are now out of the market. wow

AUDUSD breaks below 0.9230

2009-12-04T11:41:00.002+11:00

Look for further weakness.

Profit taking on higher-yielding currencies may continue

2009-12-04T10:25:00.002+11:00

Australia dollar found support near 0.9130, after slipping yesterday, as an unexpected contraction in U.S. services industries damped demand for higher-yielding assets and raised concern today’s jobless report may disappoint forecasts.

@ http://www.moneytrading.com.au/

Euro Zone data in Focus

2009-12-03T19:54:00.001+11:00

Euro Zone PMI at 8:00pm AEDT

Euro Zone GDP at 9:00pm AEDT

ECB Likely To Hold Rates and may hint gradual exit in the statement at 11:45pm AEDT

Australian retail sales up 0.3% in October 2009

2009-12-03T11:36:00.002+11:00

Result as expected,

Aussie Retail sales in focus at 11:30 AEDT

2009-12-03T07:33:00.000+11:00

Retail sales figures out today are expected to be weak, with consumer demand having softened since the government's cash payments ended mid-year. AUD gains were limited over a concern that the recent RBA rate hikes may begin to choke off economic recovery in Australia. Tuesday Australia reported weaker than expected building approvals and a modest drop in November PMI. The retail sales report today should give a better read about consumer demand in Australia and whether RBA rate hikes are impacting Australia's domestic economy.

Australian And New Zealand Dollars Soar On Strong Equities

2009-12-02T21:18:00.000+11:00

Australian and New Zealand dollars rose against their major counterparts as Asian stocks advanced on easing worries over Dubai debts.

Benchmark interest rates are 3.75 percent in Australia and 2.5 percent in New Zealand, compared with 0.1 percent in Japan and as low as zero in the U.S., attracting investors to the South Pacific nations' higher-yielding assets.

Australian dollar is directionless after RBA lifted the cash rate

2009-12-02T09:52:00.000+11:00

Australian dollar is directionless after RBA lifted the cash rate, as investors were disappointed by dovish statement following the rate rise.

The Reserve Bank of Australia raised the cash rate by 25 basis points to 3.75 per cent following its monthly board meeting. The Australian dollar traded in a close range of 0.9100 and 0.9186 following the rate hike in the local market but attracted buyers in European and the US market. RBA governor Glenn Stevens said the monetary stimulus put in place during the global economic downturn was being wound back. Aussie last traded at 0.9255.

Bearish on AUDUSD below 0.9330

2009-12-01T23:17:00.002+11:00

Daily AUDUSD chart shows clear break below support at the lower boundary of a rising channel. We are bearish on AUDUSD as long as it is below 0.9330.

AUD dips after RBA raises rates

2009-12-01T17:59:00.000+11:00

The dollar pulled back after the Reserve Bank raised interest rates to 3.75 per cent, right on market expectations.

Australian Inflation Gauge Climbs In November Raising Likelihood Of Rate Hike

2009-11-30T18:43:00.000+11:00

An unofficial monthly inflation gauge for Australia increased at a faster pace in November, a report from the Melbourne Institute and TD Securities showed on Monday. The acceleration was mainly due to higher prices of motoring, fruits & vegetables, and household supplies.

Australian Dollar Rises on Speculation RBA Will Increase Rates

2009-11-30T13:39:00.003+11:00

Australia’s dollar rose against the US dollar on speculation the central bank will increase interest rates tomorrow for a record third month.

The Australian and New Zealand dollars climbed for the first time in three days following UAE central bank's offer to give more money to lenders facing losses on Dubai World, fueling optimism investors will buy higher-yielding assets. Demand for New Zealand’s dollar increased after Prime Minister John Key rejected a proposal to slash government spending and tax rates to boost productivity.

U.A.E. Central Bank Stands Behind Lenders, Adds Funds

2009-11-30T07:35:00.000+11:00

The United Arab Emirates’ central bank said it “stands behind” the country’s local and foreign banks, which face losses from Dubai World’s possible default, and offered them access to more money under a new facility.

Banks will be able to use a special facility tied to their current accounts that can be accessed at a cost of 50 basis points above the three-month local benchmark interest rate, the Abu Dhabi-based regulator said in an e-mailed statement today.

This is a positive move by the UAE Central Bank

RBA Rate rise pressure!!

2009-11-28T16:04:00.000+11:00

Dubai's decision to delay its debt payments dominated the last week. We saw more good economic data released globally but Dubai news led to a big increase in investor risk aversion and sharp falls in most share markets, falls in currencies like the Australian dollar, Euro and a fall in the value of emerging market debts.

In Australia, both construction and capital expenditure data clouded expectations the Reserve bank of Australia would raise interest rates when they meet on Tuesday next week. If they raise rates again on December 1, it will mark the first time the bank has raised rates three times in a row since January 1990. A high interest rate means a higher return on Australian investments and the local unit tends to lift higher on speculation of a rate rise.

Construction figures released by the Australian Bureau of Statistics (ABS) showed total construction work done in Australia rose by a seasonally adjusted 2.2 per cent in the September quarter. However, capex data later in the week showed new private capital expenditure fell by a seasonally adjusted 3.9 per cent in real terms in the September quarter, well below market expectations of a one per cent rise. The worse than expected capex data made for a slightly less hawkish outlook for a rate rise next week, according to analysts.

http://www.moneytrading.com.au/

Dubai Debt restructuring is a "storm in a teacup,” - According to CBA

2009-11-27T14:03:00.000+11:00

The issue is over restructuring a relatively small amount of debt at $60 billion, which according to an August Statement by Dubai World, is backed by $99 billion in assets,” wrote Richard Grace, chief currency strategist with CBA. The United Arab Emirates, which is forecast to return to its long-term average current account surplus of 13.7 percent of gross domestic product, probably won’t let the investment company default, Grace wrote.

Possible International Debt Crisis

2009-11-27T11:11:00.003+11:00

New international debt crisis erupted in Dubai shook the market. The US dollar is 14-year lows against the yen deepened on Friday and the Australian dollar fell 3 percent against the Japanese currency as investors closed risky trades funded by yen. Australian stocks tumbled 2.7 percent on Friday as miners and banking stocks slumped following metal prices and European stocks tumbling overnight.

@ http://www.moneytrading.com.au/

Dubai World on the verge of Technical Default as it Seeks to Delay Debt Payments

2009-11-27T00:14:00.001+11:00

Dubai World, with $59 billion of liabilities, is seeking to delay debt payments of $3.52 billion of Islamic bonds due on December 14 from its property unit Nakheel . Moody’s Investors Service and Standard & Poor’s cut the ratings on several state companies, saying they may consider a default. Deloitte will be working with state-controlled companies on restructuring the debts. Dubai may have to again rely on Abu Dhabi, the capital of the U.A.E. and holder of the world’s sixth-largest crude oil reserves, for a bailout similar to one in February for a $10 billion.

Aussie & Kiwi plunged against majors!

2009-11-26T22:19:00.000+11:00

Following worse than expected Australian Capital Expenditure data today, Australian Dollar continued to decline in European Market. Today's data has in fact reduced the probability of interest rate hike on 1st December. RBA has already increased the interest rates on last two consecutive meetings and today's debt futures market was suggesting still 70 per cent chance the RBA will increase the interest rate by 0.25 per cent on 1st December.