Aust dlr weaker ahead of key inflation data =4 Sydney

AAP General News (Australia)
04-28-2000
Aust dlr weaker ahead of key inflation data =4 Sydney

The market wants a strong CPI because it fears an increase in the Australia/US differential
and the subsequent flow of investment away from Australian dollar deposits and bonds.

Overnight in the United States, reports showing strong US growth and higher-than-expected
inflation raised expectations the US Federal Reserve would raise its six per cent overnight
bank lending rate several more times this year, or in even bigger steps.

The Commerce Department announced overnight that US Gross Domestic Product grew at
a 5.4 per cent annual rate during the first three months of 2000.

In the first quarter, the Employment Cost Index rose 1.4 per cent, the biggest quarterly
advance in 10 years.

That overshadowed a quarter per cent increase in official interest rates by the European
Central Bank to 3.75 per cent.

The euro, which is closely linked to the Australian dollar, fell to record lows after
the strong US data increased concerns Europe's rates would continue to large those in
the world's largest economy.

The euro fell to an all-time low of $US0.9065 during the night.

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KEYWORD: AUST DOLLAR 4 SYDNEY

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