The Australian dollar opened lesser today as concerns about the recovery in the US economy weighed on financial markets. At 7am east-coast time, Australian dollar was trading at 89.28 US cents, down 0.19 per cent from yesterday's close of 89.47 US cents. It also buying 78.12 yen, 68.71 euro cents and 57.22 pence. Since at 5pm yesterday, the domestic dollar traded between 89.08 and 89.76 US cents. Wall Street closed lower overnight subsequent a sombre outlook from the US Federal Reserve and orders for durable goods surprisingly fell in June.
The central bank released its regional survey of the US economy, a report identified as the "beige book." The central bank said, Economic growth had been stable during the US summer in Cleveland and Kansas City, but had slowed in Atlanta and Chicago, while economic activity was modest in other regions. Also, new orders for manufactured robust goods - items such as planes, cars, refrigerators and computers - fell by one per cent in June, the US Department of Commerce said. The Bank of New Zealand currency strategist, Mike Jones, said a mild paring of risk appetite on concerns about economic growth in the US hampered risk-sensitive assets such as equities and the Australian dollar.Mr Jones said a lesser than expected inflation report on Wednesday had knocked the prospect of the Reserve Bank of Australia lifting the cash interest rate next Tuesday, August 3. The headline consumer price index rose 0.6 per cent in the June quarter, for an yearly rate of 3.1 per cent, the Australian Bureau of Statistics said on Wednesday.
Meanwhile, the basic rate of inflation rose by 0.5 per cent in the quarter to an annual rate of 2.7 per cent, to fall within the RBA's target band of two to three per cent. The median market project for headline CPI was a quarterly rise of 1.0 per cent for a yearly rate of 3.4 per cent.But the local currency lost around 0.75 US cents within minutes of the CPI report as investors reduced the likelihood of RBA rate rises in 2010. Mr Jones forecast the Australian dollar to trade between 89 and 89.5 US cents through today's Asian session.
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