2008.12.2205:21:00UTC+00Aussie Recovers From 4-day Low Against Canadian Dollar

During early European deals on Monday, the Aussie recovered from a 4-day low against the Canadian dollar, while it remained lower against the euro. Against the currencies of US and Japan, the Aussie showed strength during this time.

The Australian stock market closed lower today, ending a three-day winning streak. The market started off higher after Wall Street finished mixed on Friday, but soon lost ground amid weakness among the resources stocks. The benchmark SP/ASX 200 index closed down 58.3 points or 1.6% at 3,557.4 and the broader All Ordinaries index shed 54.9 points or 1.5% to 3,492.3.

On the economic front, the Australian Bureau of Statistics data showed that new motor vehicle sales for November in Australia declined by a seasonally adjusted 5.2% from October. New vehicle sales were also lower by a seasonally adjusted 17.8% from last year.

The Aussie that bounced between 0.6803 and 0.6842 against the US currency in early Asian deals on Monday moved off towards the end of the session. Currently, the aussie-greenback pair is worth 0.6890, up from Friday's close of 0.6806. The immediate resistance level for the pair is seen at 0.692.

In early trading on Monday, the Australian dollar slipped against the European currency and touched a low of 2.0599 at 4:55 am ET. On the downside, 2.104 is seen as the next target level for the Australian currency. The euro-aussie pair was worth 2.0476 at last week's close.

The French November PPI, German November import price index and the GfK consumer confidence report for January, which were released today likely influenced the euro.

A monthly survey conducted by the GfK Group revealed that German consumer climate is likely to remain stable in the new year, although at a low level. The indicator stood at 2.1 points for January 2009, after a revised value of 2.1 points in December. Economists were expecting a reading of 2.2 points for January.

Germany's import prices fell 1.3% year-on-year in November, in contrast to a 2.9% rise in October, a report by the Federal Statistical Office said. The statistical agency said this was the lowest year-on-year rate since March 2004, when prices fell 1.6%. Compared to the previous month, import prices fell 3.4%. Analysts expected prices to drop 2.4%.

French statistical office INSEE revealed in a report that producer price inflation slowed significantly to 1.6% in November from 4.3% in October. Economists were expecting the annual producer price inflation to slow to 2.7%. On a monthly basis, producer prices declined 1.9% in November, after falling 0.9% in October. Economists had predicted a decline of 0.9%.

The Aussie, which closed Friday's trading at 60.68 against the yen rose to 61.64 during early deals on Monday. The next upside target level for the aussie is seen at 62.1.

Japan posted its second consecutive monthly merchandise trade deficit in November, led by the biggest ever decline in November exports. Japan's Ministry of Finance reported today that the nation's trade deficit for November totaled 223.42 billion yen. The figure compared with a deficit of 67.69 billion yen in October and a surplus of 85.68 billion yen in September.

Meanwhile, the Japanese government downgraded its economic assessment for the third consecutive month. The Cabinet Office said in its Monthly Economic Report that the Japanese economy is worsening. Last month, the Cabinet Office assessed that the economy has weakened further as global economic slowdown added downward pressure on the Japanese economy.

Against the Canadian dollar, the Aussie gained ground after hitting a low of 0.8238 at 7:35 pm ET Sunday. Presently, the aussie-loonie pair is quoted at 0.8315, compared to Friday's closing value of 0.8299. If the aussie-loonie pair advances further, it may test resistance around the 0.848 level.

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