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Forex - Australia dollar down after housing trends weaken

Published 05/12/2014, 11:12 PM
Updated 05/12/2014, 11:14 PM
Aussie dolalr down after housing data
AUD/USD
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Investing.com - The Australian dollar eased Tuesday after weaker than expected data on housing trends and ahead of the first federal budget by the Liberal Party-led colaition that came to power in September last year and with markets in Singapore, Vietnam, Thailand, Cambodia, Laos, Malaysia, Myanmar and Indonesia shut for Vesak Day.

AUD/USD held at 0.9355, down 0.07%, after housing finance fell 0.9% in March, compared to a gain of 1.1% expected, and the first quarter house price index rose 1.7%, compared to a rise of 2.9% expected.

Australia's budget is expected to show a drive to curb spending and close a budget deficit - with the market watching to see if the program would lead the Reserve Bank of Australia to keep policy easy to offset the federtal austerity.

China sees retail sales, an increase of 12.2% expected, and industrial production data, up 8.9% expected, for April at 1330 local time (0530 GMT).

Overnight, the dollar traded higher against most major currencies mainly on safe-haven demand as investors priced in the possibility of a European Central Bank rate cut in June, though escalating Ukraine tensions and demand for the euro among bargain hunters steadied the greenback.

Elsewhere Monday, International Monetary Fund head Christine Lagarde renewed calls for more stimulus from the ECB, warning that persistently low inflation rates posed a serious threat to the European recovery.

Geopolitical concerns capped the greenback's advance due to fears U.S. recovery could hit a pothole if the crisis in Ukraine develops further, as many U.S. businesses are heavily exposed to Europe.

Pro-Russian separatists claimed victory in a weekend referendum on self rule in the eastern Ukrainian city of Donetsk, which stirred concerns that the country is sliding closer to civil war.

The vote has been condemned by Ukraine’s government and the West, which has threatened to hit Russia with fresh sanctions.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, rose 0.02% to 79.97.

On Tuesday, the U.S. is to produce data on retail sales, as well as reports on import prices and business inventories.

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