The AUD slid Monday as concerns about the euro-zone debt crisis continue to damp sentiment about the risk-sensitive currency.
Among a series of reports hitting sentiment, the International Monetary Fund has growing doubts about Greece’s long-term ability to cut its debts, according to a report in German news magazine Der Spiegel on Sunday. Along with hitting the local currency, the reports lifted Australian bonds on both ends of the curve.
Of more concern for the Australian dollar directly, a report from the government’s statistics bureau showed retail sales in the country were weaker than expected in November, rising only very slightly to a seasonally adjusted A$20.933 billion from A$20.927 billion in October. A poll of 15 economists by Dow Jones Newswires had tipped a 0.3% rise from October.
Notably, the central bank has cut rates in each of the last two months, with further cuts likely to hit the currency given Australia’s comparative yield advantage with the RBA’s cash rate still sitting at 4.25%.
At 0500 GMT, the AUD was trading at US$1.0172, down from US$1.0232 late Friday, but up from a session low of US$1.0148. Against the JPY, the AUD changed hands at Y78.26, down from Y78.95.
Helping the currency keep from falling further, data showed new home sales in Australia surged 6.8% in November from October, with detached houses gaining strongly. After weak reports on housing had dominated for much of 2011, the report was a slight reprieve for those concerned about the local property market.
EasyForexNews Research Team