Bloomberg News

Australian Dollar Slides as China Trade Data Disappoints

December 10, 2012

Australia’s dollar fell from near the highest level in more than two months after Chinese exports and imports trailed economists’ forecasts, damping the South Pacific nation’s trade prospects.

The so-called Aussie snapped gains from last week after the nation’s home-loan approvals increased less than economists estimated. Demand for New Zealand’s dollar was supported after data showed the nation’s manufacturing volumes rose. The currencies touched the highest in three weeks against the euro after former Italian Prime Minister Silvio Berlusconi pledged to topple incumbent leader Mario Monti.

“There was disappointment on the Chinese trade data,” Lee Wai Tuck, a currency strategist at Forecast Pte in Singapore. “We have seen strong data out of China in recent sessions, but with today’s weaker data would put some question marks as to whether the rebound in the economy is sustainable and if China’s demand for Australian goods will continue.”

The Australian dollar slid to $1.0476 as of 5:02 p.m. in Sydney, down 0.1 percent from Dec. 7 when it capped a 0.6 percent weekly gain. On Dec. 6, it touched $1.0516, the highest since Sept. 21. The Aussie rose as high as 81.48 euro cents, the strongest since Nov. 20, before trading at 81.20, up 0.1 percent from Dec. 7. It fell 0.2 percent to 86.34 yen.

The New Zealand dollar, known as the kiwi, advanced 0.1 percent to 83.29 U.S. cents and fetched 68.63 yen from 68.68 last week. The currency touched 64.63 euro cents, the highest since Nov. 13, later trading at 64.54, 0.2 percent above last week’s close.

Australian government bonds fell, with the 10-year yield rising three basis points, or 0.03 percentage point, to 3.15 percent.

Trade Data

China’s exports rose 2.9 percent in November from a year earlier while imports were unchanged, leaving a trade surplus of $19.6 billion, the customs administration said today in Beijing. The growth in overseas shipments compares with the 9 percent median estimate of analysts in a Bloomberg News survey. Imports compare with the median estimate for an increase of 2 percent.

Data released by the statistics bureau yesterday showed industrial production climbed 10.1 percent in November from a year earlier and retail sales growth accelerated to 14.9 percent. Both exceeded the median estimates of economists surveyed by Bloomberg News.

Futures traders increased bets that the Australian dollar will gain against the U.S. dollar, figures from the Washington- based Commodity Futures Trading Commission showed Dec. 7. The difference in the number of wagers by hedge funds and other large speculators on an advance in the Australian dollar compared with those on a drop -- so-called net longs -- was 92,229 on Dec. 4. That was the biggest in data going back to 1993 and compared to 76,806 from the previous week.

Net Longs

Gains in the so-called Aussie were limited after home-loan approvals trailed economists’ forecasts. The number of loans granted to build or buy homes gained 0.1 percent from September, when it increased a revised 1.1 percent, the statistics bureau said in Sydney today. The median estimate of economists in Bloomberg poll was for 3 percent growth.

“Positions for the Aussie have hit a record on the longs, and that could temper further gains,” said Forecast’s Lee, who expects the Australian dollar to drop back to parity with its U.S. peer.

Statistics New Zealand said in Wellington today that manufacturing sales excluding inflation, a gauge of the volume of production, increased 2.6 percent in the third quarter after a revised 0.5 percent advance in the three months through June.

New Zealand’s two-year swap rate, an indication of what traders expect the central bank’s key interest rate will average during the period, rose 1 1/2 basis points to 2.715 percent.

Monti Resignation

In Europe, Italian Prime Minister Mario Monti told the head of state he has lost support in Parliament and intends to resign, while earlier in the day his predecessor Silvio Berlusconi announced plans for a return to power.

“The announcements out of Italy have weighed on the euro,” said Peter Dragicevich, a currency economist in Sydney at Commonwealth Bank of Australia. (CBA) “We could see more euro weakness against the Aussie and kiwi over the coming weeks.”

To contact the reporter on this story: Mariko Ishikawa in Tokyo at mishikawa9@bloomberg.net;

To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net


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