Australian Dollar Firms on Economic Optimism, Rising Commodities Prices

Chandrasekhar Atreya
24 Dec, 2010
New York City

Sydney benchmark index ended lower trading on thin volumes of declining mining stocks. Australian dollar closed above parity for the second day. New South Wales and Queensland brace for heavy rainfall in the next seven days.

[R]6:00 PM Sydney, Australia – Sydney benchmark index ended lower trading on thin volumes of declining mining stocks. Australian dollar closed above parity for the second day. New South Wales and Queensland brace for heavy rainfall in the next seven days.[/R]

Sydney stocks traded lower led by miners on a light trading volume ahead of Christmas holidays. Commodities prices edged up in New York trading and copper hovered near record highs and crude oil topped $91 a barrel. Gold and silver eased.

The ASX 200 Index dropped 0.45% or 21.70 to close at 4,777.30 and the index gained 0.3% for the week.

The Australian dollar closed at 1.0042 U.S dollar in Sydney today.

Retailers are expected to benefit by A$6 billion on the last minute gifts buying and the first few days of Boxing Day sales.

The Australian National Retailer’s Association said on Thursday more than A$6 billion would be spent between Christmas Eve and New Year’s Day and another A$9 billion before the sales period ends in the second week of January.

Incessant rains in New South Wales affected coal production at Whitehaven Coal’s open cut mines in the Gunnedah Basin. During the five months ending November 30, the company lost approximately 3,200 operating hours across these four mines compared to only 950 hours lost during the same period last year.

The company expects that coal production in the first half will be below target by approximately 700,000 tons or 24% and affecting profit in the period.

Queensland is expected to have heavy rains over Christmas, with torrential rains forecast for part of the already drenched state.

“The tropical coast should get the brunt of the rainfall today and tomorrow, but even down in the southeast we’ll see heavy falls of around 50 mm to 100 mm a day, so over Christmas we’ll probably see totals of between 200 mm to 300 mm,” said Senior Forecaster of the Weather Bureau Rick Threlfall.

Constellation Brands, will sell most of its operations in Britain, South Africa and Australia to concentrate on its most popular brands.

Sydney-based Champ Private Equity has agreed to pay $230 million for 80% of Constellation’s businesses in these three countries. Constellation will hold 20% stake and will retain brand Hardys in Australia, Fish Hoek in South Africa and Stowells in the United Kingdom besides retaining all its brands in New Zealand, South America and Continental Europe.

Denmark’s Environment Minister Karen Ellemann confirmed today that her country is canceling planned imports of hazardous chemical waste from Australia for processing and disposal following public opposition.

The Danish government earlier in the month had postponed shipment of the first 44 containers of the highly toxic hexachlorobenzene that was to be processed at a facility in Nyborg, in central Denmark.

MacPhersons Reward Gold, a junior gold miner in Australia, made a strong debut on the Australian Stock Exchange today. The shares in the miner were up as much as 6 cents or 20% over its offering price of 30 cents.

Aurora Oil and Gas confirmed that it completed the acquisition of more sites within a shale gas field in the U.S. for $120 million in cash and increasing its reserves by 50% to an equivalent of 84 million barrels of oil.

The four main areas of interest lie onshore within the Sugarkane Eagle Ford Shale field in Texas.

Stock Movers

BHP Billiton fell 43 cents to A$46.04 while Rio Tinto declined 84 cents to close at A$86.36.

Whitehaven Coal dropped 13 cents to A$6.87 after it lowered its first half profit expectations on the heavy rains in mining region.

Newcrest declined 46 cents to A$39.82 tracking lower gold prices.

Aurora Oil and Gas gained 1.44% or 3 cents to A$2.10 after it completed purchase of additional sites in Texas shale gas fields.

Sundance Energy added 11.76% to A$0.57 after signing an agreement to expedite drilling work at its Niobara project in the U.S.