Barefoot Investor: January 2012

The Australian dollar weakened against all of its 16 major peers before the leaders of Germany and France meet today amid concern Europe’s sovereign-debt crisis is hurting global growth.

The so-called Aussie fell for a fourth day after data showed the South Pacific nation’s retail sales unexpectedly stagnated in November and Pacific Investment Management Co. said the Reserve Bank will need to ease monetary policy. New Zealand’s dollar, nicknamed the kiwi, maintained a three-day drop after a report showed the nation’s trade deficit widened.

Australia’s dollar fell 0.5 percent to $1.0173 as of 4:28 p.m. in Sydney from the close in New York on Jan. 6. New Zealand’s currency was little changed at 78.02 U.S. cents.

Credit Ratings

Germany will offer 4 billion euros ($5.1 billion) of six- month bills today, and France will auction a total of 7.7 billion euros of debt maturing in 364 days or less. Greece will offer bills tomorrow, while Spain and Italy will sell debt later this week.

Standard & Poor’s said last month it may lower the credit grades of 15 euro nations, including Germany and France.

Australia’s retail sales (AURSTSA) were unchanged in November, a report from the statistics bureau showed today, compared with the 0.4 percent gain estimated by economists in a Bloomberg News survey.

Australian 10-year government notes advanced, with yields falling six basis points, or 0.06 percentage point, to 3.73 percent.

Statistics New Zealand said today that the country’s imports exceeded exports by NZ$308 million ($240 million) in November, compared with a revised NZ$228 million deficit in October. The median estimate of economists was for a NZ$300 million shortfall.

Futures traders raised their bets the Australian dollar will rise against the U.S. currency, figures (.ADLRGN) from the Washington-based Commodity Futures Trading Commission show. The difference in the number of wagers by hedge funds and other large speculators on a gain in the Aussie compared with those on a drop was 46,537 on Jan. 3. While the so-called net longs were the most since September, the number was still less than the 2011 high of 90,938.

The net longs on Australia’s currency “remain well below their highs, reflecting some uncertainty regarding the global economic outlook,” Emma Lawson, a currency strategist at National Australia Bank Ltd. in Sydney, wrote in a report today. (Bloomberg)


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