This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Australian Dollar Gains on Commodities

Despite the risk going into Friday's jobs number, Michalowski had said that he was inclined to be long the dollar, predicting near-term strengthening.

On Thursday, the dollar advanced against the euro even after the Labor Department reported a faster-than-expected rise U.S. initial jobless claims in the week ended Apr. 30, thanks to the European Central Bank's dovish remarks.

On Thursday, policymakers left the key interest rate unchanged at 1.25%, and during a press conference that followed, European Central Bank president Jean-Claude Trichet spoke less hawkishly than expected -- dampening expectations of a rate hike in June.

"The market was looking for the word "vigilant;" vigilant about inflation -- and Trichet didn't say that at all during his entire press conference or prepared notes, so that suggests that he's more neutral about inflation, more neutral about monetary policy," Michalowski said. "The other thing that he said was that he's concerned about the level of the euro -- in particular in relation to the U.S. dollar. He said that it does play a role in their decision."

"So that also was a clue to the market that the euro at $1.48, $1.49, maybe even at $1.47, is too high for the ECB at this point, and it will have an effect on their economy." Michalowski says the markets had expected the key interest rate in Europe to rise toward 2% by the end of the year, but the expectation has now been slashed to 1.75%.

Trichet's decision came as factory orders and retail sales in Germany, the strong economy in Europe, dropped 4% and 2.1% respectively in March from the month before.

Shares of precious metal producers were rising in tandem with the Australian commodity dollar. Barrick Gold (ABX - Get Report) was up 1.9% to $47.72, Newmont Mining (NEM - Get Report) was rising 1.7% to $55.61, Kinross Gold (KGC - Get Report) was popping 2.6% to $15.16 and Goldcorp (GG - Get Report) was spiking 2.9% to $50.15.

-- Written by Andrea Tse in New York.

>To contact the writer of this article, click here: Andrea Tse.

Readers Also Like:

Copyright 2011 Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
PAL $0.04 -10.48%
ABX $11.64 0.00%
FCX $5.68 0.00%
GG $13.73 0.00%
KGC $2.30 0.00%


Chart of I:DJI
DOW 16,204.97 -211.61 -1.29%
S&P 500 1,880.05 -35.40 -1.85%
NASDAQ 4,363.1440 -146.4150 -3.25%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs