Economy

Dollar at six-week low: Midday roundup

Engel Schmidl /

The Australian dollar has fallen to a fresh six-week low ahead of the Reserve Bank’s monthly interest rate decision today.

At 11.45am the dollar was trading at US102.54 cents but overnight it dropped to US102.32 cents, its lowest point since July 25.

Fortescue to cut jobs and defer major projects after iron ore prices drop

Fortescue Metals Group is slashing costs to save $300 million by cutting jobs and deferring several projects.

In a statement to the Australian Securities Exchange, Fortescue said it had lowered its full year production and capital expenditure guidance in response to volatile market conditions and uncertainty over future iron ore prices.

Fortescue said until iron ore prices stabilise, it will push back the development of its Kings deposit within the Solomon mining hub and the completion of the fourth berth at the Herb Elliott Port project.

“These measures will result in a slight reduction to the previous FY13 production guidance of 86.5 Mt equity tonnes to a new range of 82Mt to 84Mt including the near term ramp up of Christmas Creek and Solomon Firetail,” the group said.

“As a result of these actions, Fortescue’s capital expenditure guidance for FY 2013 is revised to $US4.6 billion from the company’s previous estimate of $US6.2 billion.”

Sharemarket flat ahead of ECB decision

The Australian sharemarket has opened flat this morning despite strong leads from European stocks overnight with investors waiting on the outcome of the European Central Bank meeting scheduled for Thursday.

Wall St is closed for a United States holiday.

At the official market opening, the benchmark S&P/ASX 200 index fell 0.07% at 4,326.8 points, while the broader All Ordinaries index dropped 0.04% to 4,349.8 points.

Ric Spooner, chief market analyst, at CMC Markets said investors were wary ahead of the ECB meeting .

“The local market’s tone today will be supported by the ongoing rally in commodities such as oil and silver in response to the prospect of further monetary easing,” he says.

“There has also been minor relief on the iron ore market which has shown some signs of steadying at around $90 per tonne in recent days.”

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