Australian Dollar

The Australian dollar (Currency:AUD) has moved higher, driven partly by some encouraging numbers on Australian lending.

The pound Australian dollar exchange rate is 0.41 pct down on Monday's closing level at 1.5638. P.S: We have updated our latest sterling-based currency forecasts on our IMT publication. Entry is Free via this Facebook pathway.

The Australian dollar to US dollar is 0.39 pct higher at 0.9901.

"FX investor sentiment stabilised overnight despite weaker Asian equities and the S&P500 closing down 1.26%. Where we go from here will depend largely on how Eurozone bond markets perform from the open today," says FX Strategist Gareth Berry at UBS.


On the domestic front the Australian currency found support in news that April lending finance grew.

The value of all lending finance commitments increased 6.3% m/m in April (following a 6.1% m/m increase in March) to be 12.6% higher over the year.

The value of commercial finance commitments was 9.8% higher month-on-month in April (following a 10.1% m/m increase in March), and 19.1% higher year-on-year.

It was also reported today that, despite the 50bps rate cut by the RBA in May, business conditions declined to -4 from 0, reaching their lowest level since May 2009. 

The fall in conditions appears to have largely been driven by ongoing concerns in relation to the European debt crisis and slowing global economic activity.

"Price pressures remain benign suggesting the RBA has scope to provide further stimulus to the economy to boost activity," says a morning note from ANZ Bank.

The fall in business conditions was broad based, with conditions falling across the majority of industries and states, although the sharpest fall was recorded in the mining industry as a result of lower commodity prices.

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