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Aussie nudges higher with inflation

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Fuseworks Media
Fuseworks Media

By Tracey Warren (Stockbroking BDM, CMC Markets Stockbroking)

It was a night of little direction with US markets closed for the Martin Luther King Jr holiday and scant economic data from Europe. Thin trading conditions saw European stocks edge lower, slipping from five year highs as Deutsche Bank’s surprise quarterly loss sparked a bout of profit taking in banking stocks.

The Australian dollar found some reprieve in yesterday’s trading session as Chinese growth in the final quarter of 2013 came in slightly above market expectations at 7.7 percent; down marginally from 7.8 percent the previous quarter. The local unit is trading at three-and-a-half year lows against the greenback in the aftermath of weak jobs data seen last week. The currency should find some support at $0.8700 although a break out from here could see the unit test $0.8600.

A spike in short term market interest rates saw the Euro regain some ground trading at 1.356 against the greenback. Speculation the ECB may loosen monetary policy kept a lid on gains.

After peaking at six week highs, Gold paused for a breath overnight and is up 0.1% at US$1255.10 an ounce.

NZ interest rates are tipped to rise sooner after this morning’s surprise jump in inflation. Yesterday’s private inflation index higher read could indicate the RBA will be looking at a similar situation when Australia’s Q4 CPI numbers are released tomorrow. In the meantime, German Economic sentiment data and Canadian manufacturing data will be released tonight.

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