Australian Dollar
The Australian dollar has been boosted by an improvement in local business conditions.
At midday AEDT on Tuesday the Aussie was trading at 87.59 US cents, up from 87.05 US cents on Friday.
The currency fell as low as 86.78 US cents over the long weekend – its lowest point since July 2010 – on the back of weak Chinese manufacturing data and comments from Reserve Bank board member Heather Ridout indicating a desire for the dollar to fall to 80 US cents
.
But the currency was reversing those losses on Tuesday, partly helped by the National Australia Bank business survey which showed business conditions at a more than two-and-a-half-year high in December, Commonwealth Bank currency strategist Joseph Capurso said.
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‘‘The business conditions index gave the Aussie a bit of a bump up,’’ he said.
‘‘I think it’s just a bit of a short squeeze, the Aussie had been going down quite a bit for quite a while.
‘‘Typically what happens when you’ve done that for a while is that you get a bit of a reversal and that’s what we’ve been seeing yesterday and today.’’
Meanwhile, at midday Australian bond futures prices were lower.
The March 2014 10-year bond futures contract was trading at 96 (implying a yield of 4 per cent), down from 96.01 (3.99 per cent) on Friday.
The March 2014 three-year bond futures contract was at 97.12 (2.88 per cent), down from 97.150(2.85 per cent).
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