Investing.com - The Aussie held weaker in Asia on Monday as investors saw initial glimpse of Australia's mid-year budget update seen as promising to stave off a downgrade of its AAA (triple A) rating from S&P Global.
AUD/USD traded at 0.7269, down 0.15%, while USD/JPY changed hands at 117.64, down 0.25%. Australia's government on Monday forecast its budget deficit at A$36.5 billion ($26.6 billion) in the current fiscal year, or 2.1 percent of gross domestic product (GDP), said Treasurer Scott Morrison announced in the country's Mid-Year Economic and Fiscal Outlook, lower than an original prediction of A$37.1 billion (2.2 percent of GDP) for the year ending June 30, 2017. However, outer years are less rosy.
In Japan, the trade balance for November came in at ¥153 billion in surplus, narrower than the ¥227 billion surplus seen. Exports fell 0.4% year-on-year and imports slumped 8.8%. On Tuesday, the Bank of Japan board is expected to stand pat on policy at its two-day meeting ending Tuesday as there have been no large external shocks to derail a modest economic recovery.
Separately, China reported house prices for November rose 12.6% year-on-year, a faster pace than a 12.3% gain the previous month. But month-on-month, new home prices rose 0.6% from October's 1.1% rise, suggesting efforts to rein in China's overheated property markets is paying off.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was last quoted dow 0.23% to 102.69.
In the week ahead, market players will be eyeing the release of Thursday’s final reading on U.S. third quarter gross domestic product for fresh indications on the strength of the economy and further hints on the future path of monetary policy.
Meanwhile, market participants will be awaiting a monetary policy announcement from the Bank of Japan on Tuesday, with most investors expecting the bank to hold its negative interest rates and 10-year government bond yield target steady.
Last week, the U.S. dollar edged lower against the other major currencies on Friday, but remained near a 14-year high as the first U.S. interest-rate hike in a year and the prospect of a more-aggressive Federal Reserve in 2017 continued to lend support.
The U.S. central bank predicted it would raise interest rates three times in 2017, up from the two hikes predicted in September. Higher rates boost the dollar by making the currency more attractive to yield-seeking investors.