FXstreet.com (Barcelona) - Fourth consecutive daily advance for the AUD so far, bolstered by increasing risk appetite in the global markets.
After a dreadful May, the Aussie dollar is finding some relief at the beginning of June: the RBA cut the overnight rate 'only' 25 bps on Tuesday, against a widely expected 50 bps; GDP figures for the first quarter have surprised growing 4.3% YoY and the unemployment rate has come in at 5.1% early in the Asian session, in line with expectations.
J.Kruger, Technical Strategist at DailyFX, affirms that the bearish outlook on the cross remains unchanged, although he assesses the likeliness of a rebound due to technical studies showing 'oversold' conditions, "…and we see shorter-term risks for more of a bounce towards 1.0000-1.0200 area where the next major lower top is sought out ahead of underlying bear trend resumption…".
AUD/USD is now advancing 0.32% at 0.9946, with the next hurdle at 1.0016 (high May 15) ahead of 1.0028 (50% of 1.0475-0.9581) and 1.0070 (high May 14).
On the flip side, a violation of 0.9875 (hourly sup Jun.6) would bring 0.9767 (MA10d) and 0.9738 (hourly low Jun.6).
Finance minister to meet with IMF reps - Jamaica Observer
MINISTER of Finance and Planning Dr Peter Phillips says he will soon be meeting with International Monetary Fund (IMF) representatives to discuss the timelines for the next phase of negotiations.
"With respect to the negotiations with the IMF, I expect, in the next few weeks, to visit Washington to determine with the Fund the timelines for the next phase of our negotiations in the light of this (2012/13) Budget (including the revenue package) and the other outstanding issues," he said.
Closing the 2012/13 Budget Debate in the House of Representatives yesterday, the finance minister said every effort was being being made to conclude the negotiations post-haste.
"While one cannot predict with certainty the exact timing of the conclusion of the negotiations, I am working to bring them to a conclusion later this year," Dr Phillips said.
He noted that the IMF board met on May 30 to review Jamaica's 2011 Article IV consultation, which, among other things, provides an insight into the issues that will be of concern to the IMF's Board when it is asked to consider approving a successor programme to the aborted Stand-By Arrangement.
The minister pointed out that the report on the Article IV consultation will be published both by the Fund and the his ministry as soon as it is cleared for release.
"The draft report we have seen contains no surprises to anyone who followed my analysis of our current situation. The Board discussion and conclusions focused on some of the very areas which we have emphasised, that is, the need to: boost growth and competitiveness; and enhance fiscal sustainability," the minister said.
Dr Phillips said the IMF board broadly agreed with the assessment that a strong upfront fiscal adjustment is necessary to place the public debt on a clear downward path and to create buffers to protect against further negative shocks.
"In this regard, the IMF board stressed the importance of tax reform, containing public wages and employment, improving public financial management, and strengthening tax administration as necessary underpinnings of the fiscal consolidation efforts," he said.
In the meantime, he said the Government will be making "unprece-dented efforts to correct the slippages of the past year and is moving steadfastly to put in place a tax policy that aims at equity.
"We also intend to implement a system for parliamentary review that allows all of the people's representatives to participate to a greater degree in monitoring the programme. Hopefully, this will enhance and entrench the objectives of the fiscal responsibility framework. A broad range of issues and details are involved in coming to an agreement with the IMF," he said.
The finance minister said some of the areas of key importance are: wage restraint; pension reform; tax reform, including incentives and waivers reform and improvement in tax administration; and competitiveness reform, reducing impediments to doing business and reducing significantly the cost of energy.
Finance Minister Biti a 'punch bag', says prominent labour consultant - The Zimbabwean
"Our Minister of Finance, Tendai Biti, is a punch bag," Makings said in Harare addressing business people gathered for the monthly Express Management meeting.
This meeting is sponsored by the British Council and is attended by prominent business people especially those that were trained in the United Kingdom (UK).
"He cannot do anything right now because his hands are tied.
"What he says and does is all controlled by the government which as you know is broke and so there is really nothing that he can do to solve the economic crisis.
"We really cannot blame Tendai Biti because he is just a punch bag in the government."
The statement comes at a time when Zimbabwe is expecting a high level delegation from the Washington-based International Monetary Fund (IMF) in the country.
The delegation is coming to Zimbabwe to investigate and try to find out the nation's economic recovery progress.
"The IMF are coming next month (June) to see how we are faring," Anthony Hawkins Head of the University of Zimbabwe's Business School, said in an exclusive interview last month.
He said:"There is nothing really new about this but I think this time around they will ask where our diamond cash is going to and how it is being used.
"As you probably know the Minister of Finance, Tendai Biti, has said we could earn about $600 million from diamonds but the Minister of Mines and Mining Development, Obert Mpofu, on the other hand, says this might not be the case and so this will have to be clarified to the delegation."
Hawkins said he did not know whether Zimbabwe has paid anything yet to the IMF.
"I cannot comment on our repayment schedule because I have not heard about any repayments yet," he said.
"However, they will be worried about our diamond cash just like they were worried about the oil cash in Angola and how that was used before they could come in and help that country."
Hawkins said as long as the country did not repay its outstanding debts, the IMF would not "budge a finger" to help the economic recovery programme.
Zimbabwe's outstanding arrears to the IMF have now reached $140 million at a time when the country owes the Washington-based group $550 million, Biti, the Minister of Finance, has already confirmed.
He said Zimbabwe's outstanding arrears under the Fund's Extended Credit Facility (ECF) now amount to $140 million.
The ECF replaced the Fund's Poverty Reduction and Growth Facility.
"Zimbabwe does not have the capacity to pay off the IMF's arrears from its own resources," Biti said in Harare.
"In this regard, the country will need to request cooperating partners for a concessional bridging loan or grant to settle arrears to the IMF."
He said clearance pf ECF arrears would unlock new financing arrangements from the IMF, within the context of a Fund supported financial arrangement, which would then be used to repay the bridging loan obtained from the cooperating partners.
"Zimbabwe will, however, need a track record of implementing sound macro-economic policies and assurances that arrears to other official creditors are programmed to be cleared," Biti said.
Biti has already confirmed that Zimbabwe owes multilateral institutions a grand total of $2,504 billion, of which the World Bank is owed $1,126 billion, the IMF, $550 million, the African Development Bank (AfDB) $529 million, and the European Investment Bank (EIB), $221 million.
President Robert Mugabe has said there is an urgent need for Zimbabwe to achieve external debt sustainability through a comprehensive debt relief and arrears clearance programme.
"This must be strongly supported by my government and all the development partners and creditors," President Mugabe said.
Prime Minister, Morgan Tsvangirai, has also said it is "clear that Zimbabwe cannot rehabilitate its infrastructure and move forward with its socio-economic transformation reforms if the debt overhang challenge is not urgently resolved".
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