Dollar fails to hold gains


dollar,coin,moneyThe Australian dollar has slipped a little lower after rallying on the back of some surprisingly good business investment data.

At 0700 AEDT on Friday, the local unit was trading at 91.12 US cents, down from 91.23 cents on Thursday.

On Thursday, the Australian dollar shot up to 91.21 cents, from 90.79 US cents, after reports that capital expenditure (capex) rose 3.6 per cent in the September quarter – much better than market expectations of a 1.2 per cent fall.

However, the currency could not hold on to those gains and fell in late afternoon and overnight trade.

LTG GoldRock director Andrew Barnett said the Australian dollar had had some trouble finding buyers in the past couple of weeks.

“There seems to be an ongoing trend with the Aussie dollar that the buyers just don’t want to come like they were previously,” he said.

“We saw that capex report yesterday that was better than the market expected, that rallied the Aussie for a little while but traders quickly took profits.

“I don’t anticipate there will be anything in the coming days that will drive the Aussie up to 93 or 94 US cents.”

Barnett said the release of US employment figures on Friday next week would be crucial for the Australian dollar.

Strong US jobs growth will increase expectations that the US Federal Reserve will start to wind back its economic stimulus program in the coming months.

“If it’s a decent number above 200,000, we’re going to see the Aussie dollar at those lows for this year in the next couple of weeks,” Barnett said.

Trading volumes were low overnight because US markets were closed for the Thanksgiving Day public holiday.


You have 7 articles remaining. Unlock 15 free articles a month, it’s free.