Arab Today, arab today australian dollar may be riding for a fall
Last Updated : GMT 10:53:38
Arab Today, arab today
Arab Today, arab today

Australian dollar may be riding for a fall

Arab Today, arab today

Arab Today, arab today Australian dollar may be riding for a fall

London - Arabstoday

The Australian dollar could be vulnerable to a setback that takes it back to parity against the US dollar in the next two months. The Australian currency has risen since June 1 and is still generally in favor among foreign exchange traders. For example, data from the US Commodity Futures Trading Commission shows speculative accounts added to their holdings of it in the week ending July 3. But while the Australian dollar remains backed by one of the highest official interest rates in the developed world, growing evidence of a global economic slowdown will chip away at demand for Australia\'s raw material exports and therefore its currency. For one thing, there are signs that China\'s appetite for Australian commodities, which has helped Australia\'s economic performance and its currency, might now be waning. Australian share prices were hit on Monday by a profit warning from mineral sands miner Iluka Resources which fanned fears about slowing global growth. The firm took a dim view of prospects in China. The Australian benchmark S&P/ASX 200 index fell again after disappointing Chinese trade data on Tuesday. That data raised concerns about the strength of domestic demand in the world\'s second biggest economy as imports grew at half the expected annual pace. The breakdown of the data showed imports from Australia fell to US$6.7 billion in June from US$8.2 billion in May. Other economies are in no position to take up the slack if Chinese demand for Australian exports falters. US growth is sluggish. For example, the data on Friday showed non-farm payrolls rose by 80,000 in June. That was the third consecutive month of jobs growth below 100,000 — a level which many economists deem to be the minimum pace of job creation consistent with self-sustaining US economic growth. Meanwhile, the euro zone continues to be beset by a crisis that is sucking in more and more of its members. The natural riposte from those who are long of Australian dollars is that the Australian economy is in better health than that of either the euro zone or the United States. They say the currency\'s high standing is therefore justified. There is also the argument that the Australian dollar will be supported by those central banks who are diversifying their reserves. Russia\'s central bank said in May it would start buying Australian dollars as part of its policy of reserve diversification and, on June 22, a source familiar with the matter said those purchases had begun. But central banks actively manage their reserves and, if circumstances change, adjustments will be made. Australian dollars can be sold as well as bought. There is also the issue of where these central banks will invest Australian dollar reserves and the interest earned. Australia\'s government funding agency has slashed its annual net bond issuance to A$9 billion in the financial year that began in July, from A$44 billion in the 2011/2012 financial year. This may temper diversification interest. The logic for staying long of Australian dollars has merit, but much of it is rooted in the past. When Australia\'s central bank kept rates at 3.5 percent on July 3, Gov. Glenn Stevens spoke of a \"more subdued international outlook than was the case a few months ago.\" That could spell challenges for an economy which is so dependent on commodity exports to international markets. Factors which have supported the Australian economy\'s outperformance are shifting under the feet of a foreign exchange market that remains enamored with the Australian currency. This leaves those traders and investors who are long of Australian dollars vulnerable to a slide that could see the currency back at parity against its US counterpart. — Neal Kimberley is an FX market analyst for Reuters. The opinions expressed are his own.

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today australian dollar may be riding for a fall Arab Today, arab today australian dollar may be riding for a fall

 



Arab Today, arab today
Arab Today, arab today Fadi Kataya explains secrets of  Nancy Ajram's newlook
Arab Today, arab today Messi visit will contribute in tourism

GMT 14:04 2017 Friday ,24 February

Messi visit will contribute in tourism
Arab Today, arab today Expresses Algerian history by woody figures

GMT 13:26 2017 Friday ,24 February

Expresses Algerian history by woody figures
Arab Today, arab today Iran complying with nuclear deal

GMT 07:14 2017 Saturday ,25 February

Iran complying with nuclear deal
Arab Today, arab today Zainab al-Maliki reveals herTV presenter models

GMT 18:12 2017 Friday ,24 February

Zainab al-Maliki reveals herTV presenter models

GMT 05:20 2017 Thursday ,23 February

WTO ratifies first multilateral trade deal

GMT 21:36 2017 Wednesday ,22 February

Opec needs to prolong cuts to eliminate surplus

GMT 16:32 2017 Wednesday ,22 February

US Treasury chief tells IMF to monitor currencies

GMT 16:08 2017 Wednesday ,22 February

Qatari banks merger to rebalance financial sector

GMT 05:57 2017 Wednesday ,22 February

Britain risks clash with EU over RBS bailout

GMT 05:26 2017 Wednesday ,22 February

Singapore carbon tax would hit refiners, help renewables
View News in Arabic - Business: نفط وبتروكيماويات
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today Reading therapy relieves mental disorders

GMT 15:39 2017 Friday ,24 February

Reading therapy relieves mental disorders
Arab Today, arab today UK appoints 1st Scotland Yard chief in 188 years

GMT 05:14 2017 Thursday ,23 February

UK appoints 1st Scotland Yard chief in 188 years
Arab Today, arab today Ex-yoga missionary unleashes rage

GMT 12:16 2017 Thursday ,23 February

Ex-yoga missionary unleashes rage
Arab Today, arab today Pluto's unruly moons

GMT 06:31 2015 Thursday ,04 June

Pluto's unruly moons
Arab Today, arab today 'Constructive' Vauxhall talk with union

GMT 08:54 2017 Saturday ,25 February

'Constructive' Vauxhall talk with union
Arab Today, arab today Tesla back into red but revenue grows

GMT 07:27 2017 Thursday ,23 February

Tesla back into red but revenue grows
Arab Today, arab today Actress Lobna Abdel Aziz proud of her career

GMT 06:08 2017 Thursday ,23 February

Actress Lobna Abdel Aziz proud of her career
Arab Today, arab today Milan laughs while Rome cries

GMT 10:28 2017 Wednesday ,22 February

Milan laughs while Rome cries

GMT 07:36 2017 Wednesday ,22 February

Wafaa Amer is happy for Sherihan’s return

GMT 12:35 2017 Tuesday ,21 February

63-Year-Old Woman Delivers Baby

GMT 22:42 2017 Thursday ,23 February

Nasima Gamei revives heritage in jewelries

GMT 15:53 2017 Tuesday ,21 February

Small ponds have outsized impact

GMT 20:33 2017 Friday ,17 February

To release new antiques collection

GMT 10:20 2017 Thursday ,23 February

Brazil's top diplomat resigns

GMT 09:59 2017 Monday ,20 February

Tourism shows signs of recovery

GMT 13:12 2015 Saturday ,09 May

Sheikh Sultan opens Sharjah Centre

GMT 20:02 2017 Tuesday ,21 February

Nohan Seyam designs beautiful accessories
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday