Australian Reduces U.S. Treasury Holdings; Dollar Hovers Near Parity

Chandrasekhar Atreya
19 Oct, 2010
New York City

Australian shares pared its weak start to this week but stayed little changed and the Australian dollar hovered near the parity with the U.S. dollar. Construction industry survey highlighted worker shortage. Australia reduces U.S. Treasury holdings in August by 25%.

[R]6:00 PM Sydney, Australia – Australian shares pared its weak start to this week but stayed little changed and the Australian dollar hovered near the parity with the U.S. dollar. Construction industry survey highlighted worker shortage. Australia reduces U.S. Treasury holdings in August by 25%.[/R]

Australian stocks opened lower but closed up marginally after commodities prices strengthened and the Australian dollar held firm.

The ASX 200 Index added just 0.08% or 3.80 points to close at 4,655.70.

The Australian dollar traded within 2 U.S. cents of parity with the greenback after the RBA released its minutes of latest meeting. The dollar closed at 98.81 U.S cents in Sydney today.

The Australian currency traded at 98.48 U.S. cents at 5 p.m. in Sydney from 98.89 cents in New York Monday, after reaching 99.60 cents following the release of the RBA minutes.

The RBA’s decision to leave interest rate unchanged at its last meeting on October 5 was “finely balanced,” according to the minutes of that meeting that were published today.

The RBA says it could raise interest rates at some point soon, saying rising inflation may eventually force tighter policy settings, adding that it could not hold off indefinitely to see whether shocks from the world economy emerged before it acted to tighten its economy.

The Australian Industry Group/Australian Constructors Association construction outlook survey found that the value of construction work will rise by 5.9% in fiscal year ending in 2011 and 7.9% in the fiscal year ending in 2012. This follows a 1.5% increase in fiscal year ending in 2010.

A shortage of construction workers could have a restricting effect on the upswing in the construction sector, a new survey has found.

Australian Industry Group CEO Heather Ridout said it is critical that the recovery in the commercial and engineering sectors is supported by a sensible immigration policy that will help relieve the stresses on a labor market already stretched by the demand of the resources sector.

Copper prices rallied to their highest in London and Shanghai since July 2008 on Tuesday, while zinc prices in China jumped to peaks not seen since January.

Australian retailers lost more than $10.31 billion to shoplifting and theft by employees during the past four years although the trend is on the decline, a survey has found.

The fourth Global Retail Theft Barometer monitored the loss from shoplifters/employee theft and administrative errors in the retail industry in the 12 months to June 2010. The annual survey found Australian firms had a drop of 7.3% in reported loss from theft to $2.31 billion, or 1.39% of total sales.

The decline followed three years of rising losses which peaked to 1.5% loss in 2009.

Canadian pension funds are the latest group to consider trying to block BHP Billiton’s $40 billion bid for Potash Corp of Saskatchewan.

According to Canada’s Globe and Mail newspaper, Alberta’s provincial money manager was leading the discussions among the country’s pension funds to preserve the independence of Potash Corp by trying to block the offer made by BHP.

Canada’s First Quantum Minerals said it plans to restart the Ravensthorpe nickel plant operations in Western Australia, following the $190 million renovation program.

Chief Executive Philip Pascall told a Perth resources seminar that the company plans to start the plant in a phased manner and build up output to 39,000 tons a year of nickel.

Australia reduced its U.S. Treasury holdings by as much as a quarter in August to its lowest level since June of 2009.

Australia held $11.7 billion of Treasury securities in August, down from $15.3 billion July, according to the latest official figures available.

Resources News

St Barbara gold production continued to grow in line with expectations and the production is estimated at 63,488 ounces in the quarter ending in September.

Tap Oil said it plans to sell its 75% interest in the R3 Retention Lease in the offshore Carnarvon Basin in Western Australia to Oil Basins Ltd.

Azumah Resources raised $30 million to fund its Ghana project through a placement of shares at 60 cents a share.

Korab Resources said Tuesday it secured additional area at Rum Jungle project in Northern Territory thus doubling the area of its tenements.

Gainers & Losers

Gunns Ltd led gainers in the ASX 200 with a rally of 21.88% to A$0.78 followed by Elders Ltd 9.17% to A$0.655, Prime Infrastructure Group 6.3% to A$4.89, Nufarm Ltd 5.79% to A$4.57 and Lynas Corp Ltd 5.47% to A$1.735.

Macmahon Holdings Ltd led decliners in the index with a drop of 21.01% to A$0.545 followed by Isoft Group Ltd 9.09% to A$0.10, Ausenco Ltd 6.14% to A$2.60, Platinum Asset Management Ltd 4.97% to A$4.78 and Carsales.com Ltd 4.75% to A$4.81.