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Forex - AUD/USD strengthens on capex data, JPY stronger on retail sales

Published 11/27/2013, 07:58 PM
Updated 11/27/2013, 08:57 PM
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Investing.com - The Australian dollar gained smartly in Asian trade on Thursday after data on capital expenditure plans for the third quarter surprised on the upside and the yen gained against the dollar after strong retail sales data in thin trading ahead of the U.S. Thanksgiving holiday.

AUD/USD traded at 0.9132. up 0.56%,after the third quarter capex data rose 3.6%, compared to a forecast of a 1.2% decline.

Total capital expenditure, or capex, rose for the second straight quarter with manufacturing up for the first time in eight quarters. The outlook for capex was also strong, with the fourth estimate for 2013-14 raised to A$166.8 billion.

USD/JPY traded at 101.97, down 0.19%, after preliminary October retail sales rose 2.3%, above a forecast of 2.1%, posting the third straight year-on-year rise on solid demand for big-ticket items before a sales tax hike in April 2014 that coincides with an expected stimulus package to support the economy.

NZD/USD traded at 0.8158, up 0.11%, after a surge in business confidence reported in an ANZ survey lifted the currency following data  from the Reserve Bank of New Zealand that showed loans above 80% of the value of property were just 12.8% of new commitments in October, down from 25.5% in September and 26.5% in August.

Confidence in November rose to 60.5 points from 53.2 points in October with anticipated employment growth highest for the construction sector.

The high loan-to-value ratio (LVR) rules are aimed at cooling surging house prices that can ramp up inflation pressures in an economy still rebuilding from an earthquake that hit the city of Christchurch in 2011 and a shortage of affordable housing in cities like Auckland.

Under the rules, banks can lend no more than 10% of their total new mortgage lending with a LVR above 80%.

"The reduction in high-LVR lending will help to reduce the risks of a sharp correction in house prices in an already overvalued housing market," said RBNZ deputy governor, Grant Spencer, adding that he expects a bigger impact once banks clear pre-approvals made prior to the new rules coming into effect.

The RBNZ said it will provide data on the loan limits monthly.

Overnight, the dollar gained against most major currencies after a widely-watched consumer sentiment index beat expectations and boosted demand for the greenback after the University of Michigan said its index of overall consumer sentiment was revised up to 75.1 in November from a preliminary estimate of 72.0.

Economists had expected the index to be revised up to 73.5.

The report was released two days in advance due to the U.S. Thanksgiving holiday on Thursday.

Also on Wednesday, the Department of Labor said the number of individuals filing for initial jobless benefits last week declined by 10,000 to a two-month low of 316,000. Economists had forecast an increase of 4,000.

The jobs data was released one day early due to the U.S. holiday.

The upbeat data offset a report showing that U.S. durable goods orders fell 2% in October, worse than expectations for a 1.9% decline, while core durable goods orders were down 0.1%, compared to expectations for a 0.5% increase.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, traded at 80.71, down 0.02%.

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