The Australian dollar edged down against its major counterparts in early Asian trading on Thursday following the release of a worse-than-expected Australian retail sales figures for the month of December. The aussie reached a new 6-week low against the US dollar and 2-day lows against the rest of majors.
However, after 7:30 pm ET, the aussie recovered slightly and showed choppy trading against other majors.
Retail sales in Australia were down 0.7 percent to a seasonally adjusted A$19.925 billion in December compared to the previous month, the Australian Bureau of Statistics said today. That was well below analyst expectations for a 0.2 percent monthly increase following the 1.4 percent gain in November.
For the fourth quarter of 2009, retail sales were up 1.1 percent compared to the previous three months, roughly in line with expectations for a 1.0 percent gain.
In a separate report, the Australian Bureau of Statistics said that building approvals in Australia were up a seasonally adjusted 2.2 percent to reach 14,869 units in December. That was higher than analyst forecasts for a flat reading after the 5.9 percent increase in November.
On an annual basis, approvals surged 53.3 percent – surpassing expectations for a 38.2 percent increase after the 33.3 percent gain in the previous month.
On the equity front, the Australian stock market is trading notably lower today with investors indulging in some selling following a negative close on Wall Street on the back of some disappointing data from the services sector.
The benchmark S&P/ASX 200 index is currently trading at 4,600, down 48.3 points or 1% from its previous close. The broader All Ordinaries index is down 47.20 points or 1% at 4,626.
The aussie tumbled to a fresh 6-week low of 0.8777 against the greenback by 7:30 pm ET and breaching the 0.873 support could set its weakest level in 4 months. The aussie-buck pair that was worth 0.8831 at Wednesday’s North American close is presently quoted at 0.88.
Yesterday, the payroll processor Automatic Data Processing (ADP) reported that non-farm private employment fell by 22,000 jobs in the month of January following a revised decrease of 61,000 jobs in December.
Economists had expected employment to decrease by about 30,000 jobs compared to the loss of 84,000 jobs originally reported for the previous month. The decrease also marked the smallest drop in jobs since employment began falling in February of 2008.
In a separate report, the Institute for Supply Management said its service sector index edged up to 50.5 in January from a downwardly revised 49.8 in December, with a reading above 50 indicating growth in the sector. Economists had forecast the index to rise to 51.0 from the 50.1 originally reported for the previous month.
The aussie dropped to a 2-day low of 79.72 against the Japanese yen around 7:30 pm ET and is likely to break the 79.3 support, which could set its lowest level in nearly 7-weeks. The aussie-yen pair is presently worth 80.06, compared to 80.36 hit late New York Wednesday.
Against the euro, the aussie reached a 2-day low of 1.5828 at this time and this may be compared to yesterday’s close of 1.5742. If the aussie weakens further, it may find support around the 1.587 level. The euro-aussie pair is presently quoted at 1.5773.
The Australian dollar also declined to a 2-day low of 0.933 against the Canadian dollar at 7:30 pm ET and a drop below the 0.93 support could set its weakest point in more than 5-weeks. The aussie-loonie pair that closed Wednesday’s New York session at 0.9385 is presently quoted at 0.9347.
However, the Australian currency stabilized after hitting a 6-day high of 1.2658 against the NZ dollar around 5:50 pm ET. The aussie-kiwi pair that closed yesterday’s deals at 1.2582 is presently quoted at 1.2622.
The kiwi tumbled after a report showed unemployment in New Zealand spiked to its highest level in more than a decade in the final three months of 2009.
Statistics NZ reported today that the nation’s jobless rate surged to 7.3 percent in the December 2009 quarter, up from 6.5 percent in the previous quarter. The agency said the increase in unemployment was mainly due to a rise in the number of people entering the labor force but unable to find work.
Traders are looking forward to the European session, in which the German factory orders for December and the European Central Bank’s interest rate decision are expected.
Economists expect the ECB to hold rate at 1 percent.
From the U.S, the preliminary fourth quarter non-farm productivity, weekly jobless claims for the week ended January 30 and the factory orders for December are expected to influence markets in the North American session.