Just when we thought Greece’s economic woes were being put on the back burner, poor bond auction sales overnight continued to weigh on investor sentiment, sparking up another bout of worries as the economy attempts to curb the budget deficit. This translated to losses from the Euro after some mild strength in last two sessions. In contrast Sterling was able to squeeze out some reasonable gains against the greenback and remains perched above US$1.5000.
Economic data from the states saw consumer confidence surpass expectations record a level of 52.5 in March against forecast of a rise to 51 from a previous level of 46. The S&P/Case Shiller home price index for the month of January declined to a level of 145.3 from a previous 145.9 to represent an annual contraction of 0.7 percent.
Locally, the Aussie dollar rose to highs of 92.15 US Cents, however dollar strength prevailed with the local unit slipping back to current levels of 91.8 US cents as the US session drew to a close. Local economic feedback today includes Retail Sales which is expected to grow 0.3 percent in February against previous growth of 1.2 percent and February Building Approvals are expected to show 2.1 percent growth, from a previous 7.0 percent contraction.
We expect the local unit to be highly contingent to this data with the simple equation being the better these figures print the more likely we are to see a stronger price activity from the Aussie. With money markets factoring in near 90 percent chance of a rate rise in next Tuesday’s RBA meeting a less than convincing result in today’s figures could also see reasonable downside for the local unit.