New Day, New Record for Aussie

The Australian dollar posted yet another all-time record versus its US counterpart before retreating. The gains was spurred the growing retail sales, but the unexpected drop of building approvals restrained the currency.

The Australian retail sails rose 0.5% in February, following the rise of 0.4% in January. The rate of growth was expected to remain unchanged at 0.4%. The number of building approvals fell 7.4% in February following the fall of 11.6% in the previous month. This reading shows the analysts was to optimistic, expecting a growth by 4.2%.

Trade Surplus Makes New Zealand Dollar Stronger

The New Zealand dollar advanced today after the nation’s traded balance posted a surplus for the first time in eight months as commodity prices continue to advance.

The New Zealand trade balance posted the surplus of NZ$194 million in February. The reading was definitely better compared to the January decrease by NZ$3 million, but still somewhat lower than the forecast NZ$238 million. The exports rose $550 million, while the imports increased $684 million. The major contributor to the increase of the exports was the milk powder, butter, and cheese commodity group.

Trade Balance Deficit Shrinks — Sterling Gains

The Great Britain pound advanced today, erasing yesterday’s losses versus the US dollar, as the report showed that the increasing exports made the deficit of the UK trade balance lower than was predicted.

The UK deficit of trade balance narrowed to £7.1 billion in January, compared with the deficit of £9.7 billion in December (originally published as the deficit of £9.2 billion). The higher deficit of £8.5 billion was expected. The deficit shrank as the exports rose by £1.3 billion and the imports fell by £1.3 billion. The report tomorrow is expected to show that the manufacturing production in Britain advanced in January after the decline in December.

Dollar Rises vs. Pound & Yen on Improving Labor Market

The US dollar strengthened versus the Great Britain pound and the Japanese yen as the macroeconomic reports showed that the US jobs market improved, causing optimism about the future of the US economy. The currency retreated against the euro.

Inflation Pressure Makes Euro Stronger

The euro advanced on the speculation that the accelerating inflation will make the European Central Bank to raise the interest rates before the Federal Reserve.

The Eurozone annual inflation rose to 2.3 percent in January from 2.2 percent in December 2010. The consumer prices remained above the ECB target of 2 percent for the second month. The rising consumer prices spurred the speculation that the inflation pressure will prompt the ECB to increase the rates. Most analysts, though, don’t think that this will happen on the meeting of the ECB policy maker this week.