Aussie dollar dip rallies market
A sharp falling Australian dollar rallied the wool market last week, which finished 0.7 per cent higher as the US exchange rate fell by 1.5 per cent.
The $A eased to US95.5c before rallying later in the week to finish at US96.7c, which was 1.1c lower than the previous week, according to AWEX.
The lower dollar was a reaction to the third quarter gross domestic product (GDP) report which had the Australian economy reeling from a slower-than-expected growth period.
However, even though the third-quarter GDP was just a 0.2 per cent increase, it was on the back of a robust 1.1 per cent growth in the second quarter, according to the Summit Roy report.
The report said the 2010 GDP should come in well above 3 per cent, even after the latest disappointment.
Summit Roy said there was evidence of continued strong growth and support from Australia’s key trading partner.
The Chinese Manufacturing Purchasing Managers Index was reported to be 55.2 in November, up from the previous month and above consensus estimate of 54.8, according to Summit Roy.
AWEX said last week’s soft start began with finer microns 30c lower when compared to the superior Newcastle selection from the previous week.
“A late rally on Wednesday signalled a reversal in fortunes for all micron categories, ” AWEX said.
The wool market will offer about 58,315 bales this week.
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