Australia: The Australian Dollar fell on Friday's trading again on the back of weaker equity markets and talk increased that US investment bank Goldman Sachs might be the subject of a criminal prosecution by the US Justice Department in addition to the civil case recently brought by the SEC. The AUD traded in the low 0.9300's on Friday afternoon and has opened in the mid 0.9200's this morning. The Goldman Sachs rumour spooked equity markets with the Dow off 1.4% to 11,009 and the S&P 500 falling 1.7% and the NASDAQ 2%. This was against a generally improving economic background with US GDP rising 3.2% for Q1 as compared on a quarter to quarter basis. Personal consumption rose by 3.6% in Q1 the highest in 3 years. The Henry tax review was announced yesterday and it appears only a few of the recommendations will be adopted by the Rudd Government including corporate tax cuts, higher superannuation contributions and additional infrastructure funding financed by a new federal resource tax in future years. All eyes will be on the RBA's interest rate announcement on Tuesday afternoon with most analysts predicting another increase in the cash rate of 0.25% to 4.50%. Today house price index data along with the RBA commodity Index is released.
Majors: The Eurozone continues to limp along with unemployment remained steady at 10% in March although some other countries are plagued by much higher rates such as Spain with 19.1% and Ireland at 13.2% and Portugal at 10.5%. Generally AUD cross rates are lower this morning after the better than expected Q1 GDP in the US and a slightly stronger USD. Markets are likely to be quiet today with Japan and China closed for a holiday as well as the UK. Over the weekend the People's Bank of China raised the reserve requirement by 0.50% to 17%, the third time this year. These tightenings are likely to continue in the future.