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Aussie dollar off lows, hesitates over 92 cents

Published: 26 Oct 2009 17:35:37 PST

__________AUSTRALIAN CREDIT/FOREX (0100 GMT) SNAPSHOT__________ FOREIGN EXCHANGE (against previous Sydney close) <AUD=> 0.9173/75 (0.9235/37) <AUDNZD=R>1.2275/88 (1.2250/57) <AUDJPY=R> 84.48/54 (84.71/76) <JPY=> 92.10/14 (91.73/76) <AUDEUR=R> 0.6170/73 (0.6141/44) <EUR=> 1.4862/63 (1.5033/36) DEBT FUTURES CASH YIELDS 90-DAY BILL<YBAc1> (DEC) 95.65 ( 0.000) <AU3MBB=RR> 3.72(3.71) 3-YR BOND <YTTc1> (DEC) 95.58 (+0.010) <AU3YT=RR> 5.29(5.29) 10-YR BOND <YTCc1> (DEC) 94.245(-0.015) <AU10YT=RR> 5.80(5.79) 3/10 SPREAD +0.860 (+0.860) AUST/US 10-YR SPREAD +225(+229) S&P/ASX 200 4777.2 (4830.3) US10-YR <US10YT=RR> 3.55(3.50) __________________________ Oct 27______________________________

DATA: A quarterly survey from National Australia Bank <NAB.AX> (NAB) showed a measure of business confidence rising 20 points to +16 points. A measure of business conditions rose 14 points to +3 in the third quarter [ID:nSYD469801]. ________________________________________________________________

* The Australian dollar inched up from lows on Tuesday but was still below 92 U.S. cents, having fallen in offshore trade as investors booked profits in long positions.

* Shortly after midday, the Aussie was at $0.9173, down from $0.9235 seen late here on Monday. It is unlikely to fall past $0.9130 amid lingering speculation of steep rate hikes in coming months.

* The U.S. dollar, seen as a safe-haven when doubts about a global recovery emerge, traded around the 76 mark against a basket of currencies <.DXY> <=USD>. That index posted its best daily gain since September on Monday, pulling further away from a 14-month low of 74.94 on Oct. 21.

* Aussie <AUDJPY=R> dropped to 84.45 yen from 84.71 yen late on Monday. Support is expected around 84 yen level.

* Traders awaiting U.S. consumer confidence and house price data out later in the session for more direction. Locally, all eyes are on the third-quarter consumer price index numbers due on Wednesday.

* The numbers have assumed significance after recent Reserve Bank of Australia (RBA) commentary turned towards inflation from supporting growth.

* Implied cash rates, based on money market and swap rates <CSRBA=CSAU>, are fully pricing in a 25 basis point hike and factoring in around a 25 percent chance the central bank will raise rates by 50 basis points on Nov. 3.

* Australian bond futures at shorter end rose, as buying emerged at lower levels amid doubts on whether the central bank will opt for a 50 basis point hike next month.

* Three-year futures <YTTc1> were 0.01 points higher at 94.58 while the 10-year contract <YTCc1> was marginally lower at 94.245.