Australian Dollar Nears Parity, 27-year High

Chandrasekhar Atreya
07 Oct, 2010
New York City

The Australian dollar gained more than 1% after the jobs report and the U.S. dollar weakness across all major currencies. The Aussie dollar surged to 27-year high and has rebounded 50% in the last two years. Construction activity and job vacancies drop in September.

[R]6:00 PM Sydney, Australia – The Australian dollar gained more than 1% after the jobs report and the U.S. dollar weakness across all major currencies. The Aussie dollar surged to 27-year high and has rebounded 50% in the last two years. Construction activity and job vacancies drop in September.[/R]

Stocks in Sydney trading edged lower but rebounded in a volatile trading after the September jobs report. The Australian dollar also gained 1.1% after the U.S. dollar declined to eight month low against the euro. The Australian dollar closed at a 27-year high.

The ASX 200 index rose 0.10% or 4.50 points to close at 4,691.30. The Australian dollar has so far jumped 8.3% in the past month against the dollar.

The Australian dollar closed at 98.71 U.S. cents higher than the previous peak of 98.49 U.S. cents in the first quarter of 2008. Higher employment rate and the U.S. fiscal woes has lifted the Aussie dollar in the last two years.

The Aussie dollar sank to 49 U.S. cents in the 2001 and 2002 period and has since then sharply rebounded in the last two years. The Australian dollar was floated in December 1983 and quickly dropped to 60 U.S. cents in 1986 but managed to rebound to 90 U.S. cents in 1990.

On July 15, 2008 the Australian dollar touched 98.48 U.S cents.

September unemployment rate in Australia was a seasonally adjusted 5.1% compared with an unrevised 5.1% in August, the Australian Bureau of Statistics said Thursday.

Total employment in the month rose 49,500 to 11.324 million. Full time employment rose by 55,800 to 7.984 million and part time was down by 6,300 to 3.34 million.

Job vacancies nationwide fell in September as the possibility of higher interest rates hurt retailers while tourism industry felt the pinch of the high Australian dollar, according to a survey.

Job agency IPA Recruitment said the number of job vacancies in September fell 5.7% after a steady August.

Construction industry contracted in September for the fourth month in a row after the sector was plagued by weak demand following reduction of government stimulus.

The latest Australian Industry Group Australian/Housing Industry Association Performance of Construction Index fell 2.4 points to 40.8 in September, well below the 50 point level that separates expansion from contraction.

The Wonthaggi desalination plant will cost Victorians $2.3 billion more than the tabled $18.08 billion according to the state’s audit report.

Auditor General Des Pearson said in his examination of the tabled estimates that the nominal value of the desalination plant over the size of the 27.75 year contract will be $18.08 billion, which is $2.3 billion more than concluded by the Department of Sustainability and Environment in its annual report tabled in parliament last month.

Australian Federal Police confirmed their part in the raids relating to alleged corruption at one of the world’s leading currency printing firm Securency, which is joint venture between Reserve Bank of Australia and U.K.-based Innovia Films Ltd.

Police are reportedly investigating allegations that bribes were paid to senior politicians and banking officials by agents working for the company to win contracts to produce polymer notes.

Shares of NGM Resources are in trading halt ahead of an announcement by the Takeovers Panel regarding Paladin Energy’s decision to walk away from its friendly $27 million acquisition offer for NGM.

Credit Agricole SA, France’s third-largest bank by market value, started marketing at least A$300 million of three year notes in its first sale of kangaroo bonds.

The notes are expected to be priced Friday subject to market conditions, according to a statement from Commonwealth Bank of Australia, which is lead managing the sale with Australia and New Zealand Banking Group Ltd and two other banks.

Australia will cut water supplies to irrigators by 27% to 37% and divert the savings to environmental flows, the Australian newspaper said Thursday.

A Murray-Darling Basin Authority report scheduled for tomorrow is expected to recommend that 3,000 to 4,000 gigaliters of water be taken away from irrigators and added to water that is already diverted to the environment, the newspaper said, citing the briefing with South Australia’s government.

Resources News

Coal production at Anglo American Metallurgical Coal in Queensland got disrupted due to heavy rains, the company said Thursday.

Beadell Resources announced today the finding of the additional “high grade” drill results from its Tucano gold project in Brazil.

Perilya Ltd, the NSW-based zinc and lead miner, took a major step towards diversification after agreeing to take over Toronto-listed GlobeStar Mining Corporation for $186.1 million.

Queensland-based coal miner Northern Energy placed a trading halt on its shares pending an announcement regarding a non-binding, indicative takeover offer.

Gainers & Losers

Sundance Resources led gainers in the ASX with a rise of 9.8% to A$0.28 followed by Cudeco Ltd 8.59% to A$2.15, Mirabela Nickel Ltd 7.12% to A$1.805, Panaust Ltd 4.93% to A$0.745 and Macarthur Coal Ltd 4.44% to A$12.95.

Infigen Energy led decliners in the index with a fall of 4.2% to A$0.685 followed by Carnarvon Petroleum Ltd 3.16% to A$0.46, Toll Holdings Ltd 2.86% to A$6.80, Dexus Property Group 2.37% to A$0.825 and Energy World Corp Ltd 2.35% to A$0.415.