$A down one US cent as Greek poll looms

Reported by AAP
Wednesday, May 16, 2012
Sold for $1.3 million one day, no buyers for $440,000 the nextRundown home shows death of mining boom.

The Australian dollar is extending its fall below below parity with the US dollar as renewed worries about debt-stricken Greece weighs on the currency.

Greece is expected to hold new elections, possibly on June 17, after political leaders failed to form a coalition government after a poll 10 days ago didn't deliver a clear winner.

The Australian dollar fell below 99 US cents in afternoon trade on Wednesday for the first time since December 20 and at 1700 AEST was trading at 98.93 US cents,

On Tuesday, it finished the local session at 100.02 cents.

Easy Forex currency trader Tony Darvall said the Australian dollar would grind lower until there was some certainty about Greece.

"Many traders are taking money off the table waiting to see what Greece leaving the euro zone means," he said.

"As soon as they've worked out the impact then the uncertainty is gone.

"Even if we know it's bad we can at least put a price tag on it, when we don't know how bad it is then the default position is to sell."

Mr Darvall said the Australian dollar should not go much lower than 98.60 US cents in the next day or so because that's when currency traders would start to buy the Australian dollar again.

"We haven't really had this sort of selling in the Aussie for a long time - not in the last five years," he said.

"Eventually, given that there is no structural US problem, stocks markets (and the Australian dollar) will have a big day."

Mr Darvall said he expected the Australian dollar be between 97 US cents and 98 US cents by the end of May.

At 1700 AEST, the Australian dollar was at 79.50 Japanese yen, down from Tuesday's close of 79.93 yen, and at 77.93 euro cents, up from 77.80 euro cents.

Meanwhile Australian bond future prices inched higher.

At 1630 AEST on Wednesday, the 10-year bond futures contract was trading at 96.820 (implying a yield of 3.180 per cent), up from 96.785 (3.215 per cent) at Tuesday's close.

The June three-year bond futures contract was at 97.430 (2.570 per cent), up from 97.390 (2.610 per cent) previously.

On Tuesday, the 10-year bond futures prices hit a record high at 96.850, and the three-year bond futures prices hit an all-time high at 97.470.

Deutsche Bank bond trader Andrew Bryan said euro zone prospects continued to weigh on the market.

"Domestic data is not of major interest to markets at the moment, and it is expected to remain like this until we get this Greek election out of the way. And that's another four weeks away."

The Reserve Bank of Australia's trade weighted index fell to 74.3 on Wednesday, from 74.5 on Wednesday.

29/05/2016 17:37Sydney, Australia. 29 May,2016
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