Wednesday, the Aussie pared the gains it made in early Asian deals against the currencies of US, Japan and Canada despite a rally in Asian stocks and an upbeat Australian GDP report. The Aussie thus eased from an 8-day high against the greenback. Meanwhile, the aussie remained lower against the euro and the kiwi in the session and fell to a 2-day low against the euro.
Despite a flat close on Wall Street overnight, the Australian stock market is trading firm today with investors picking up blue chips from across various sectors amid hopes of a sustained growth of the Australian economy. Stronger commodity prices are also aiding the rally.
The benchmark S&P/ASX 200 index is currently trading at 4,733.4, up 31.5 points or 0.7% over its previous close. The broader All Ordinaries index is up 31.20 points or 0.7% at 4,741.20.
In economic news, Australia’s economy grew by a seasonally adjusted 0.9% in the final quarter of calendar year 2009. The Australian Bureau of Statistics reported that gross domestic product increased 2.7% for the full 2009 year. The quarterly increase matched economists’ estimates, while the full year growth was slightly better than forecasts.
Meanwhile, the Australian Industry Group said in a report that the AIG / Commonwealth Bank Australia performance of services index rose to 48.3 in February from 47.4 in the previous month.
The Aussie that strengthened against the US currency in early Wednesday Asian deals lost ground after reaching an 8-day high of 0.9067 at 7:35 pm ET. As of now, the aussie-greenback pair is trading near yesterday’s close of 0.9034 with 0.900 seen as the next target level.
The Aussie dropped after hitting highs of 0.9379 against the Canadian dollar at 7:30 pm ET and 80.38 against the yen at 7:05 pm ET. At present, the aussie is worth 80.11 against the yen and 0.9348 against the loonie, down from yesterday’s close of 80.25 and 0.9357, respectively. If the Aussie slides further, it may target 0.932 against the Canadian currency and 79.7 against the yen.
During early Asian deals on Wednesday, the Aussie declined against the currency of Europe. The euro-aussie pair that closed yesterday’s trading at 1.5079 is presently worth 1.5104. This set a 2-day low for the Australian currency. The next downside target level for the aussie is seen at 1.530.
The Aussie weakened against the New Zealand dollar in early Asian deals on Wednesday. Currently, the aussie-kiwi pair is worth 1.297 with 1.294 seen as the next downside target level. At yesterday’s close, the pair was quoted at 1.2986.
The German and the Euro-zone retail sales for January and the services PMI reports from the major European economies for February are expected in the upcoming session.
From the U.S., the ADP employment report and the ISM non-manufacturing index- both for February and the Federal Reserve’s Beige Book are slated for release in the North American session.