The flight to yield has boosted the value of the Australian Dollar closer to 75 US cents but we still believe the Aussie is set to fall in the coming weeks to settle around 70 US cents. There are number of reasons for this; 1) the primary being the concern from relatively weak Chinese manufacturing data which is causing a big two speed domestic economy - the so called mining and resources states of Queensland and Western Australia and the rest and 2) US fed on a rate hike strategy supported by lower unemployment and growth of the US economy at around 2%. The boost in AUD in recent weeks was somewhat triggered by preview data from the US that the growth may not reach 2% and the other factor being a surprising fall in the unemployment data to 5.8% below the 6% mark in February.
market data
| Australia Cash rate Australia 90 day bank bill Australia 10 y bond US 10y Govt bond AUD/USD AUD/EUR AUD/JPY AUD/CNY ASX 200 S&P 500 Dow Jones Shanghai Composite Brent Oil (USD per BBL) Gold Spot (USD per oz) Iron Ore 60% MBIOI-IR index USD/t (Updated Wednesday) | As at 25-Mar 2.00 2.30 2.56 1.88 0.7492 0.6706 84.48 4.8785 5084.00 2037.00 17535.00 2957.00 40.28 1219.00 54.64 | 18-Mar 2.00 2.33 2.55 1.87 0.7645 0.6758 85.14 4.9436 5183 2049 17602 2955 41.2 1255 52.26 |
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