By FXEmpire.com
Australia Just Needs A Break
he Australian dollar is lower after news of a successful Spanish bond auction was overshadowed by weaker US economic data and rumors of a downgrade to France’s credit rating. Today, the currency was trading at 103.15, down from 103.63 on Thursday afternoon.
The Australian dollar has continued to move lower after weaker US economic data and rumors of a French credit rating downgrade weighed on risk sentiment overnight.
Traders are closely watching meetings of G20 finance ministers and the International Monetary Fund (IMF) in Washington over the weekend.
The meetings could provide support for the currency if the IMF succeeds in raising more than 400 billion euros from member nations for a “global firewall” to protect against the fallout from a possible new European sovereign debt crisis.
To the extent that the IMF can secure additional funding, that will give financial markets comfort that, should a systemic event happen in Europe, the fund will be there behind any country that needs it..
The Australian Bureau of Statistics on Tuesday is due to release consumer price index (CPI) data for the March quarter.
The Reserve Bank of Australia (RBA) has indicated that a relatively soft inflation figure will give in room to cut the cash rate in May from its current level of 4.25 per cent.
On Friday, the June 10-year bond futures contract was trading at 96.240 up from 96.230 on Thursday.
Australian Bond future prices are higher after weaker US economic data and rumors of a French credit downgrade overshadowed Spain’s successful debt auction.
Spain sold 2.54 billion euros in two- and 10-year bonds overnight, passing what was seen as a crucial test of market confidence, although it was forced to pay a higher premium to attract investors.
However, the auction was overshadowed by rumors of a downgrade to France’s credit rating, which helped send European stock markets lower.
Meanwhile, in the US, economic data showed an increase in the number of people applying for unemployment benefits and a drop in home sales during March.
The New Zealand dollar is after strong demand for Spanish government bonds failed to quell fears Europe will be able to contain a sovereign debt crisis.
The New Zealand dollar fell as low as 81.18 cents overnight from 81.64 cents on Thursday .
Click here a current NZD/USD Chart.
Originally posted here
