Obama hails new figures
President Barack Obama hails new figures showing the US economy grew by 3.5 per cent in the third quarter.
Update The Australian dollar took a big hit in overseas trade on Friday, as doubts over the US economic recovery weighed on financial markets.
The dollar slid to 89.97 US cents, after having closed at 91.45 US cents in Sydney on Friday, recouping some of the sharp losses seen earlier this week.
In data overnight, US consumers cut spending in September and turned
gloomier this month, underscoring the fragility of the economy's
recovery even as signs emerged that manufacturing may be picking up.
The Commerce Department said on Friday consumer spending fell 0.5 per
cent last month, the largest drop since December, after a 1.4 per cent
increase in August. The decline, which was in line with market
expectations, followed the end of a government incentive program to
boost auto sales.
A separate report showed factory activity in the nation's Midwest
expanding for the first time in more than a year, but employment
conditions deteriorated. A dismal jobs market appeared to weigh on
consumers, with the Reuters/University of Michigan final index of
sentiment for October slipping to 70.6 from 73.5 last month.
"This was a much needed correction for the Aussie where a lot of stale long positions got unwound," said Tony Beiber, forex analyst at Suncorp Bank, on Friday in Australia. "We could see it pop its head above 92 US cents if we get more positive US data later today. Better data would provide a fillip to commodities and stocks and hence the Aussie."
The Reserve Bank of Australia (RBA) is widely expected to lift its key cash rate by 25 basis points to 3.5 per cent at its monthly policy meeting next Tuesday.
Australian bond futures were mixed, with the long end giving up some of its impressive gains made in the previous session after safe-haven inflows eased. But the shorter end moved up on bargain hunting.
Three-year futures were 0.03 points higher at 94.87 while the 10-year contract lost 0.025 points to 94.415.
Reuters
