Investing.com – The Australian dollar fell against the U.S. dollar on Thursday after data that showed Australia's capital expenditure fell more than expected in the fourth quarter and that expectations for next year also declined.
In early Asian trade, AUD/USD declined 0.44% at 0.8928, USD/JPY fell 0.02% at 102.34 and NZD/USD eased 0.04% at 0.8310.
The Australian Bureau of Statistics reported that capital expenditure in the fourth quarter fell by 5.2% against an expectation of 1%. Capex in all the three major industry groups fell in the latest quarter with manufacturing capex down once again after rebounding in the third quarter. The revised estimate for 2013-14 capex was little-changed at A$167.1 billion and in line with expectations, but the first estimate for next year's capex intentions showed a 27% drop in mining capex, indicating investments into the resources sector are likely to fall sharply.
Earlier, statistics New Zealand reported that January’s trade surplus widened to NZ$306 million against the expectation of NZ$216 million. This was highest ever surplus for any January month. In December the surplus was NZ$493 million. Exports in January were NZ$4.08 billion, out of which NZ$1.2 billion went to China and NZ$556 million to Australia.
In Japan, the Ministry of Finance released weekly international transactions in securities data that revealed that foreign bond buying increased to ¥598.8 billion from ¥503.5 billion.
At 1245 (0345 GMT) the MOF will release the results of its 2-year JGB auction. The MOF is due to auction ¥2.9 trillion of 2-year bonds and ¥5.7 trillion of three-month Treasury discount bills.
Later at 1600 to 1730 Tokyo (0700-0830 GMT), BOJ board member Takehiro Sato will speak on recent initiatives to improve market infrastructure for JGB settlements - enhancing the potential of JGBs as global financial assets - at a seminar hosted by the International Bankers Association of Japan. The BOJ will release his speech at 1730 (0830 GMT).
The People's Bank of China set the yuan's central parity rate against the U.S. dollar at 6.1224 Thursday, lower than Wednesday's 6.1192. The market has been closely watching the yuan parity rate as the PBOC attempts to unify onshore and offshore quotes.
Turmoil in the Chinese currency and stock markets sent investors running for the cover of the bond market on Wednesday, which marked the first time spot yuan has traded stronger than its previous close since the previous Wednesday. Traders said "Big Four" state banks aren't buying dollars as aggressively as they have been, though its unclear if they've been told to hold off on quiet orders from the PBOC.
Meanwhile on Wednesday, the dollar rose against most major currencies after data on new U.S. homes sales came in much better than expected and put to rest concerns the Federal Reserve may slow the pace at which it tapers monetary stimulus programs.
Stimulus programs such as the Fed's $65 billion in monthly bond purchases tend to weaken the dollar by driving down interest rates, sending investors to stocks with hopes that corporate investing and hiring results from rising equity prices.
The Commerce Department reported earlier that new home sales jumped 9.6% to 468,000 units in January, blowing past market expectations for a 1% decline to 400,000.
New home sales in December were revised up to 427,000 units from a previously reported 414,000 units.
The numbers renewed perceptions that a wave of soft factory, jobs and other economic indicators hitting the wire this year reflected rough winter weather that disrupted commerce and not an underlying softening of demand.
Investors were looking ahead to testimony by Federal Reserve Chair Janet Yellen on Thursday for insight as to whether or not the U.S. central bank will maintain the current pace of its cuts to monthly bond purchases.
Markets were expecting that Yellen will echo past statements that the U.S. monetary authority will continue rolling back its asset purchase program, as long as the economy improves as expected.
The Fed is currently buying $65 billion in Treasury and mortgage debt a month to suppress interest rates to spur recovery, which weakens the dollar as a side effect.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.01% at 80.43.
On Thursday, the U.S. is to release data on durable goods orders, a leading indicator of production, and the weekly report on initial jobless claims.