Economy

Dollar hits six month high, BHP profit falls in first half: Midday Roundup

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The Australian dollar has risen to a seven-month high this morning, after a surprise decision by the Reserve Bank to leave rates on hold at 4.25%.

 

The local currency reached $US1.0788 in early trade, the highest level since August last year.

“After the RBA decision, the interest rate market got caught completely wrong-footed, as well as probably the stock market, so we saw a big jump up in the Australian dollar,” HiFX senior trader Stuart Ive said.

BHP profit falls in first half

BHP Billiton has posted a profit of $US9.94 billion for the first half of the year, representing a 5.5% decline from the previous corresponding period.

The move comes after analyst had expected profit to reach over $US10 billion. Meanwhile, revenue has risen 9.7% to $US37 billion.

In a statement, the company said the trading environment has remained challenging.

“In the longer-term, we remain positive on the outlook for the global economy as the drivers of urbanisation and industrialisation in China, India and other emerging economies are expected to underpin global growth and robust commodities demand,” the company said.

The company also said the United States and Japanese operations are expected to report growth during the upcoming quarters.

Swan tells bank customers to shop around

Federal treasurer Wayne Swan has said borrowers can take their business elsewhere if their financial institutions impose interest rate rises, despite the RBA keeping the official interest rate flat at 4.25% yesterday.

“You can get far better deals than that elsewhere in the financial system right now,” he told reporters in Canberra this morning. He also said the Government “doesn’t regulate interest rates”, despite protest from the Greens.

“We haven’t done so for a very long period of time.”

However, Greens MP Adam Bandt told reporters he wants to see the introduction of new mortgage products that would have interest rates that fall and rise in line with RBA movements.

“I would hope the Government is prepared to look at this legislation, and look at it seriously,” he said.

Shares flat despite positive US leads

The Australian sharemarket has opened flat this morning despite positive leads from the United States, where investors are hopeful of progress being made over the European debt crisis.

The benchmark S&P/ASX200 index was up 3.1 points or 0.1% to 4277.3 at 12.00 AEST, while the Australian dollar has hit yet another all-time high at $US1.08c.

AMP share have risen 0.23% to $4.33 while Commonwealth Bank shares fell 0.26% to $50.38. ANZ rose 1.08% to $21.59 as Westpac lost 0.14% to $20.89.

In the United States, the Dow Jones Industrial Average rose 33 points or 0.3% to 12,878.

Australand profit declines in first half

Australand profit fell 15% in the first half of the year, it announced today, with earnings down to $140 million.

In a statement, the company said the outlook for the business is dependent on consumer sentiment.

“The domestic economy is soft in most sectors outside of resources and we anticipate that conditions will remain challenging for at least the first half of 2012,” the company said.

“Despite the near-term challenges, the group remains cautiously optimistic and is budgeting for an increase in operating earnings per security for 2012.”

Qantas jet safety not in question

Qantas has said the turbulence that caused injury to seven people aboard one of its A380 aircraft was not related to hairline cracks found after the flight had landed.

“This cracking is not related to the turbulence, or specific to Qantas but it is traced back to a manufacturing issue,” a spokesperson has told Reuters.

“Airbus has confirmed that it has no effect on flight safety.”

The company has also said the jet will be back in the air within a week.

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