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Australian Dollar Weakens Against Most Majors

The Australian dollar edged lower against its major rivals, barring the Japanese yen, in early Asian deals Monday as a number of negative economic news, caution ahead of key earnings reports from the U.S. this week and melting hopes of additional stimulus in China and Europe kept traders away from taking positions in commodity-linked currencies.

According to data released by the Australian Bureau of Statistics, the total number of owner occupied home loans in Australia was down a seasonally adjusted 0.5 percent on month in November, standing at 46,199.

The total value of home loans was down 0.8 percent on month to A$21.46 billion. Investment lending contracted 3.3 percent on month to A$7.52 billion. The value of owner occupied housing loans added 0.6 percent on month at A$13.940 billion.

The number of first home buyer commitments as a percentage of total owner occupied housing finance commitments fell to 15.8 percent in November from 18.7 percent in October.

Meanwhile, the total number of job advertisements in Australia was down 3.8 percent on month in December, at 133.352, according to a survey from ANZ. That follows the upwardly revised 2.8 percent contraction in November, originally -2.9 percent.

Internet job ads dropped 3.9 percent in December, while newspaper ads fell 0.4 percent. On a yearly basis, the total number of job ads was down 15.3 percent.

A gauge measuring inflation in Australia came in higher by 0.4 percent on month in December, after easing 0.1 percent in November, TD Securities said today. On a yearly basis, CPI was called higher by 2.4 percent, dipping from 2.5 percent in the previous month.

That keeps inflation within the Reserve Bank of Australia's comfort zone, after the central bank trimmed interest rates last month by 25 basis points or 3 percent.

The U.S. trade deficit unexpectedly widened in November, according to a report released by the Commerce Department on Friday, with a jump in imports more than offsetting an increase in exports.

The report showed that the trade deficit widened to $48.7 billion in November from a revised $42.1 billion in October. The wider deficit surprised economists, who had expected the deficit to narrow to $41.1 billion from the $42.2 billion deficit originally reported for the previous month.

The Australian dollar slipped back to below the key 1.27 mark against the euro after a gap of 12-days, falling as much as 1.2715, down almost 0.4 percent from last week's close of 1.2666.

The aussie is poised to extend its downtrend as it is moving well-away from the trend-line support of EUR/AUD cross with 1.2760 seen as the next likely target level.

The euro extended last week's strong rally on Monday thanks to last week's solid debt auction in Spain and a unanimous ECB vote to hold rates unchanged sparked risk-sentiment.

The Australian dollar also fell to a 4-day low of 1.0524 against the US dollar and a session's low of 1.2563 against the NZ dollar on Monday morning in Asia. Although the former pair recovered some of its recent losses in the course of the session, the latter remained in lower-ranges.

On the flip-side, the Australian dollar jumped to 94.68 against the yen for the first time since August 2008 as the latter extended previous week's free fall on hopes of further monetary easing from the Bank of Japan next week. If the pair extends rally, likely resistance level is seen at 95.70.

Looking ahead, the eurozone industrial production data for November is the lone data to watch in the European session today.

There are no major economic data to consider in the North American session.

by RTTNews Staff Writer

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