The dollar receives another pounding

By RICHARD WEBB Sunday 1 October 2000

The Australian dollar fell in New York overnight on Friday after overseas traders gave a thumbs down to the economic news released in Australia ahead of the trading session.

The $A finished at 54.23 US cents, down from 54.38 US cents, to end the week 0.5 per cent lower. It was the third-worst performance of a major currency against the $US after the Canadian and New Zealand dollars.

Traders said the $A slumped after news that Australia's merchandise trade deficit for August had blown out to $1.3 billion. The deficit was expected to be about $750 million.

On the positive side, they said the currency looked primed to rally in the coming week, with most analysts tipping the Reserve Bank of Australia to lift benchmark interest rates by 0.25 per cent after its board meeting on Tuesday.

That move, if it materialises, would lift Australian benchmark rates to 6.5 per cent and bring them in line with US rates.

Elsewhere, gold finished $US1.80 lower at $US274.25 an ounce, with the $A fall and selling by Australian producers blamed.

Platinum found some support on news of a strike by 30 per cent of the mining workforce at Anglo American Platinum Corp, finishing 10 US cents higher at $US576.80. Traders said it could move rapidly to $US600 if the strike snowballed.

And coffee staged a dramatic turnaround after reports the major coffee producing nations were renewing a commitment to an export-retention program. Coffee futures for December jumped 3.15 US cents, or 3.9 per cent, to finish at 83 US cents a pound.

The OPEC-inspired Association of Coffee Producing Countries met in London on Friday and considered a plan to boost coffee prices by withholding 20 per cent of coffee exports from today. Coffee prices have been falling since December, 1999, when they touched $US1.45 a pound.

The plan is believed to have support from the world's leading producers.

http://www.theage.com.au/bus/20001001/A25148-2000Sep30.html

-- Martin Thompson (mthom1927@aol.com), September 30, 2000