The upwards march of the Australian dollar continued to day, with higher commodity prices pushing the local currency up to US85.6c in early trade.
The dollar, which is being helped by a falling US dollar, upwards pressure on Australian interest rates and improved commodity prices, has now climbed from around US65c over the last 12 months.
Today, currency traders will be closely watching a raft of economic data from the Chinese Government, including year-on-year retail sales, producer price index, trade balance numbers and industrial production figures.
A strong Chinese economy is seen to help Australia’s economic growth.
Shares higher as Wall Street keeps rising
Australia shares have edged higher again after another good night on Wall Street, where shares rose for the fifth consecutive session.
The benchmark ASX-S&P 200 index increased 17.8 points of 0.4% to be at 4588.6 at 12:00 AEST.
News Corp was the best performer of the morning, with its shares jumping 3.8% to $15.83 on news that Kerry Stokes and James Packer have reached a truce over the battle for Consolidated Media.
Telstra shares rose 1.8% to $3.33 while NAB was the best of the big banks, with shares up 0.9% to $29.08.
On Wall Street, the Dow Jones industrial average was up 0.84% and the Nasdaq Composite Index was 1.15% on the back of better news for company earnings. Proctor & Gamble shares jumped 4.2% after it reaffirmed its earnings guidance.
Who’s to blame for the GFC?
The hand-wringing among investment bankers continued overnight, with UBS chairman Kaspar Villiger claiming politicians in the US should take most of the blame for policies that encourage low interest rates, lending to poor people and changes to accounting rules.
“Many banks have made inexcusable mistakes. However, these mistakes are not the cause of the crisis. The markets have not failed, they have reacted logically to the misguided incentives set by politicians, in particular [in] the US,” he told a conference on restoring trust in financial markets.
Villiger, a former Swiss finance minister, said governments now had to resist the temptation to over-regulated financial markets in response to the crisis.
There is now the risk that due to the incorrect diagnosis of the causes of the crisis, the patient will be administered the incorrect medicine for too long which may significantly worsen global growth prospects.”
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
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