Aust Dollar Back Above US80c

The Australian dollar has recovered some ground after briefly dipping below US80c on the back of the European Central Bank economic stimulus decision.

The currency dropped to a five-and-a-half year low of US79.95c on Friday morning after losing more than half a US cent overnight following the unveiling of the European Central Bank’s 60 billion euros ($85bn) a month stimulus plan.

By 12.00pm (AEDT), the Australian dollar had bounced back to US80.34c, but was still down from US80.66c on Thursday.

The ECB’s bond buying program was a little larger than the 50bn euros a month predicted by some analysts.

LTG GoldRock director Andrew Barnett said the Australian dollar bounced back because US80c is where traders start buying the currency, as they don’t think it will fall far below that at the moment.

“There’s a huge support level at US80c for the Australian dollar, but if the it closes under that for a day or two, with a bit of weakness we could see US75c in the next six or eight weeks,” he said.

Mr Barnett is confident the Australian dollar will keep falling, which will stop the Reserve Bank of Australia from cutting the cash rate.

“Glenn Stevens doesn’t want to put interest rates down – he’d prefer not to and if the Aussie dollar is going under US80c, drifting towards US75c I think the RBA will hold fire,” he said.

The Australian bond market was firmer.

At noon, the March 2015 10-year bond futures contract was trading at 97.435 (implying a yield of 2.565 per cent), unchanged from Thursday.

The March 2015 three-year bond futures contract was at 97.960 (2.040 per cent), up from 97.940 (2.060 per cent).

This news story is reprinted from www.businessspectator.com.au

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Shares Jump After Energy Price Rebound

The Australian share market is rising strongly, with energy and resource stocks aided by a rebound in global oil prices over the weekend.

Shortly before the midday (AEDT) the ASX 200 had added 69 points, or 1.3 per cent, to 5,368.

The All Ordinaries index was 66 points higher at 5,343.

Local investors are following the lead set by healthy gains on Wall Street on Friday night, when the S&P 500 rose 1.3 per cent.

That rise was underpinned by a 5 per cent bounce in West Texas crude oil, to $US48.44 a barrel.

As a result, oil-exposed Australian-listed firms are also benefitting today.

Oil Search had gained 4.6 per cent, while Santos was up 1.9 per cent and Woodside had risen 1.6 per cent.

BHP Billiton had jumped 4.6 per cent and Rio Tinto was 2.1 per cent higher.

Fortescue Metals Group had added 3.9 per cent and gold miner Newcrest was up 1.4 per cent.

The higher oil price has taken some shine off the airlines though, with Qantas down 2.2 per cent and Virgin Australia falling 1.1 per cent.

The major banks were all trading higher with gains of 0.9 per cent for ANZ, NAB and Westpac and 0.4 per cent for the Commonwealth.

Macquarie Bank had jumped 5.2 per cent, after advising investors it now expects to report an improved full-year profit.

The Australian dollar was buying around 82.3 US cents.

This news story is reprinted from www.abc.net.au

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