Aussie dollar looks for direction
June 19th, 2009 by Bryden Elssmann
Closing Data
| current | change | % | |
|---|---|---|---|
| Dow Jones | 8555.6 | 58.42 | 0.7% |
| NASDAQ | 1807.72 | -0.34 | -0.0% |
| S P 500 | 918.37 | 7.66 | 0.8% |
| FTSE 100 | 4280.86 | 2.4 | 0.1% |
| Nikkei 225 | 9703.72 | -137.13 | -1.4% |
| SPI Futures | 3895 | 34 | 0.9% |
| All Ords | 3,887.00 | -16.8 | -0.4% |
| Oil | 71.42 | 0.35 | 0.5% |
| Gold | 934.6 | -1.4 | -0.1% |
| Silver | 14.24 | -0.04 | -0.3% |
| Aluminium | 1589.5 | 27 | 1.7% |
| Copper | 4901 | -2 | -0.0% |
| Lead | 1639 | 29 | 1.8% |
| Nickel | 14760 | 110 | 0.8% |
| Tin | 14900 | 20 | 0.1% |
| Zinc | 1516 | -4 | -0.3% |
Wall Street
The Dow and S&P 500 moved higher, thanks to a pickup in commodity and health care stocks, to break a three-day losing streak. Adding to the gains was recent data onthe job market and regional manufacturing which revived hopes that the recession-hit economy is stabilising. The data revived optimism that the US economy may be improving however any sustained rally will require a plethora of good news. The Dow rose 58.42 points, or 0.7 percent to 8555.60 after losing 302 points over the prior three sessions. The S&P 500 gained 7.66 points, or 0.8 percent to 918.37.
Gold fell on speculation that a stronger dollar and an improving U.S. economy will reduce the metal’s investment appeal. Gold declined US$1.40 an ounce to $US934.6. Silver also declined.
Crude oil rose after reports signalled that the U.S. economy will rebound later this year, prompting an increase in energy demand. Crude oil for July delivery rose 27 cents, or 0.4 percent, to $US71.30 a barrel.
Aussie dollar looks for direction
The Australian dollar has straddled a tight range this month on hopes the world economy had seen its worse and was set for a recovery. Howerve optimism is fading as some investors think the currency has risen too fast coupled with concerns over a less robust Chinese economy. China is Australia’s top trading partner and the second-biggest buyer of Australian exports, after Japan. This concern does not bode well with the Aussie dollar.
If the Aussie breaks support at $0.7830, it would complete a bearish double-top formation that may see it fall further to $0.7730, $0.7400 and then $0.7135. Adding to the downward pressure, the RBA sold A$1.43 billion worth of Australian dollars on a net basis in May, the largest amount sold in any month since February 2004. Many analysts think the Aussie is set for a pull-back, and are recommending investors short the currency at current levels. This is potentially good for currency sensitive stocks, watch CSL and resource stocks…
Australian Market
Australian shares are expected to open positive this morning with possible gains in financials after a pickup in their U.S. counterparts. The market could find some support from U.S. job market and regional manufacturing data that revived hopes for an economic recovery and sent Wall Street higher, while shares in energy producers could get a boost from rising oil prices.
The SPI is currently 0.5 percent higher at 3,882.
Contact your Freeman Fox Stockbroker on 07 3031 9960 or 1800 003 369 Ext 7.
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