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$A rides high on Greek debt deal

Reported by AAP
Friday, March 9, 2012
Topics in this article:
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The Australian dollar continued its rise on Friday with traders relieved there may be an end in sight for the current chapter in the Greek government debt crisis.

At 1700 AEDT, the Australian dollar was trading at 106.48 US cents, up from 106.16 cents on Thursday.

The euro also rose against the US dollar, finishing the Australian session on Friday at 132.58 US cents, from 131.77 US cents on Thursday.

Since 0700 AEDT on Friday, the local unit traded between 106.18 US cents and 106.64 cents.

Overnight, the Greek bond swap was able to attract enough private investors, to allow Athens to slash its debt burden and enable the country to receive a new bailout package from the European Central Bank and the International Monetary Fund.

CMC Markets senior foreign exchange dealer Tim Waterer said the market has done a U-turn on its expectations for the Greek debt relief deal in recent days.

"It's taken away some demand for safe-havens like the US dollar and the Japanese yen," Mr Waterer said.

"It was quite a solid day for the Australian dollar."

Official data released on Friday morning showed Australia's goods and services trade balance went into deficit in January for the first time since February 2011.

Mr Waterer said the Australian dollar fell a little after the release of the trade figures.

"The downturn (in the Australian dollar) was fairly short lived when traders realised the negative impact on exports was mainly due to the Chinese new year and that we will see a bounce back in coming months," he said.

"That's allowed the Aussie to recover."

Mr Waterer said the there was a lot of optimism about on Friday night's (AEDT) release of key US employment data for February, known as non-farm payrolls data.

The median market forecast is for US employment growth of more than 200,000 jobs for a third straight month in February.

"A good result tonight could see the Australian dollar re-claim the 107.00 US-cent level," Mr Waterer said.

At 1700 AEDT, the Australian dollar was at 87.11 Japanese yen, up from Thursday's close of 86.35 yen, and at 80.33 euro cents, down from 80.57 euro cents.

Meanwhile, Australian bond futures prices fell.

Commonwealth Bank interest rate strategist Philip Brown said bond prices rose a few points after the disappointing trade data, but the sell-off quickly resumed as optimism about the Greek debt relief deal dominated sentiment.

"Once the market was happy that the Greek deal went through, the main move was a sell-off," Mr Brown said.

"To be honest, the trade data wouldn't normally affect the bond market much, but there's been a run of data this week that's been on the weak side."

At 1630 AEDT on Friday, the March 10-year bond futures contract was trading at 95.940 (implying a yield of 4.060 per cent), down from 96.000 (4.000 per cent) on Thursday.

The March three-year bond futures contract was at 96.370 (3.630 per cent), down from 96.440 (3.560 per cent).

The Reserve Bank of Australia's trade weighted index rose to 78.6, from 78.3 on Thursday.

01/11/2014 12:38Sydney, Australia. 1 November,2014
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