$a Consolidates Gains As Gold Steadies
The Age
Monday August 9, 1993
The dollar managed to capitalise on its previous gains after a shaky start yesterday, with dealers saying it should consolidate around 68.50 US cents this week.
After a bearish opening at 68.07 US cents, the local unit quickly hit a trough at 68.05 but gained throughout the day as gold prices steadied after free-falling from last week's $US408 highs. The dollar finished at its day's peak of 68.27, up from Friday's finish of 68.13.
Yesterday's favorable ANZ job advertising data failed to hoist the local dollar out of a tight band, with dealers saying domestic markets would now mark time until the release of July unemployment data on Thursday and the federal Budget next Tuesday.
Citibank's chief economist, Mr Grant Bailey, said that unless gold prices dived again, ``the Australian dollar should remain relatively well supported, but no bullish surge is likely ahead of the 1993-94 Budget announcement".
As investors cautiously returned to test the European markets, the ensuing strength of the mark against the yen helped the US dollar to firm 0.23 yen on Tokyo markets yesterday.
The greenback traded in a tight range to end the day at 104.58 yen, helped also by the quelling of political uncertainty in Japan as the Prime Minister, Mr Hosokawa, named his new Cabinet.
The Reserve Bank's trade-weighted basket of major currencies finished steady at 50.1 points.
On the nation's credit markets, key Commonwealth August 2003 bonds found support from higher US Treasury bond prices, closing at 6.92 per cent from 6.95 previously.
One dealer said the inflation-sensitive long end should remain in bullish mode in the lead-up to the federal Budget, with low inflation and signs of growth in the economy expected to continue to hammer down long yields.
The physical markets also rallied yesterday with 90-day paper dropping three points to finish at 4.78 per cent and 180-day paper falling four points to 4.72.
Unofficial cash returned to 4.75 per cent from 4.70 previously.
© 1993 The Age
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