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FX Market Commentary - 12th March 2010Chinese inflation fears capped global market gains overnight; fuelling speculation China may take stringent measures to cool the economy. Yesterday the Consumer Price index showed Chinese inflation has spiked to a 16-month high recording annual growth of 2.7 percent from 1.5 percent in January. The Aussie dollar however remained resilient overnight despite the news from China and yesterdays weaker than expected jobs data, with the local unit rebounding from session lows of 91.1 US cents to current levels of 91.5 US cents. Australia’s unemployment rate edged up to 5.3 percent from the previous downward revision of 5.2 percent. The finer points of the data showed the Australian economy created 11,400 jobs in February; however the net result showed only 400 new jobs created when factoring in the 11,000 part time positions lost. This latest result is likely to have a significant impact on the RBA’s stance on interest rates in the April meeting in conjunction with the minutes from the March meeting due for release on Tuesday. To the US and US Jobless claims for the week ending March 6 failed to meet expectations, with the number of people filing for unemployment benefits rising to 462,000 against the predicted 455,000. The US Trade Balance showed the deficit eased to US$37.29B from the revised US$39.9B in December. Economists had estimated a widening trade deficit to US$40.80b. The US dollar is mixed against major currencies – the Dollar index which measures the dollar's value relative to six major foreign currencies is currently trading at 80.28 down 0.2 percent. |
