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South Pacific Currencies Dip on Slowdown Signs
Submitted by Anonymous on Mon, 09/07/2012 - 12:54
Tradervox.com (Dublin) – The south pacific dollars have touched their lowest for the month versus the Japanese yen as data from China, Japan, and US signaled economic slowdown. The Australian and New Zealand Dollars held to their July 6 low as Asian stocks dropped in the global market, diminishing demand for riskier assets. Further, the currencies dropped as data from Japan showed Japan’s machinery orders dropped the most in seven years, which further compounded fears raised by US data last week showing weaker jobs growth in June. In addition, slowdown in global economy was also signaled by Chinese data which showed consumer prices had the slowest incline pace in two years.
Ray Attrill, who is the head of Foreign Exchange Strategy at the National Australia Bank Ltd, has commented that the Australian dollar may continue to come lower as the market experiences a risk aversion environment. The risk aversion in the market might push the Australian to as low as 98 US cents by the end of September, and might even reach 97 US cents by the year end according to Attrill’s forecast.
Data from world largest economies have indicated a slowdown in the economy which is detrimental for the commodity related currencies. The US employment increased by 80,000 in June, while it had increased by 77,000 in May according to Labor Department report released last week. This is a slower than expected data, where the market was expecting an increase of 100,000 jobs. In Japan, Machinery orders dropped by 14.8 percent in May; Machinery orders data is used to indicate capital spending in the country. In China, data from National Bureau of Statistics showed consumer prices increased by 2.2 percent in June, registering the slowest advance in more than two years.
Australian dollar dipped to 80.96 yen, the lowest it has been since June 29; it later rebounded to 81.20 at the close trading in Sydney. The Aussie dropped 0.2 percent $1.0190 extending its 0.6 percent loss on July 6. The New Zealand dollar touched its weakest this month when it traded at 63.30 yen. It extended its 0.7 percent drop against the US dollar on July 6 by 0.2 percent to settle at 79.62 US cents.
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