Australian dollar passes US95c, ANZ hit with $50m class action: Economy Roundup

The Australian dollar has reached a two-year high this morning, jumping over US95.8c for the first time since the global financial crisis begun.

The movement has sparked a wave of commentary from economists and entrepreneurs, with mining giant Andrew Forrest telling Fairfax he expects the dollar to hit parity the US dollar “shortly”.

The current value of the dollar represents a substantial increase from its low of 81.58c earlier this year in May. The boost is being driven in part by continued weakness in the United States where the Federal Reserve has indicated it will continue to prop up the American economy.

Part of the more recent boost has been driven by an indication from the Federal Reserve that interest rates will continue to rise.

Meanwhile, retailer David Jones has recorded a full year net profit after tax of $170.8 million, representing a 9% increase for the 12 months to 31 July. Full-year sales grew by 3.4% to $2.05 billion.

The company also said its 2011 forecast was for a net profit increase of between 5-10%. Chief executive Paul Zahra said the company’s result was the highest profit and dividend since its 2005 listing.

“We are two years into our FY09 – FY12 Strategic Plan and I am pleased to advise that we are ahead of our stated targets,” he said, also commenting on the widespread discount

“For the two years since FY08, profit after tax has a compound annual growth rate of approximately 12% per annum compared to our target of five to 10% growth per annum,” he said.

“We are also well positioned to fully leverage the next upturn in the economic cycle.”

ANZ hit with class-action lawsuit

ANZ has been hit with a $50 million class-action lawsuit by customers who are seeking recovery of bank fees, law firm Maurice Blackburn announced today.

The firm said it will file the suit against ANZ in the Federal Court today, with another dozen cases in the pipeline. The firm says banks have charged as much as $1.2 billion in unfair “exception” fees which include overdrawing charges and charges for late credit card payments.

The suit is filed on behalf of three lead applications along with 40,000 businesses and over 27,000 individuals.

“We will argue that fees charged were unjust within the meaning of the Consumer Credit Code,” Maurice Blackburn chairman Bernard Murphy said in a statement.

Other major banks including NAB, Commonwealth Bank, Westpac and Bank of Queensland could all be targets, the company said.

The Australian sharemarket has opened higher this morning following mixed leads from Wall Street where the Federal Reserve announced new measures to prop up the American economy.

The benchmark S&P/ASX200 index was up eight points or 0.18% to 4625.8 at 12.20 AEST. The Australian dollar was trading at US95.6c.

Westpac gained 0.6% to $23.46 while Commonwealth Bank shares rose 0.2% to $52.70. ANZ rose 0.4% to $23.89 as AMP gained 0.4% to $5.11.

CFS Retail Property Trust has entered a trading halt ahead of what the company says will be a “significant transaction”.

The halt has been granted until Friday morning, or until an announcement is made. The halt comes after a report in the Australian Financial Review said the property division of Colonial First State is currently in negotiations to purchase half of the DFO outlet in a deal reportedly worth about $600 million.

Lend Lease wins US Army contract

Property developer Lend Lease has won a $US600 million contract with the US Army as part of the military’s privatisation of lodgings.

The new deal will see Lend Lease renovate, develop and manage the second stage of the PAL program. The entire deal is worth about $US350 million and will be completed in the second half of 2011.

OZ Minerals non-executive director Michael Eager has died, according to a statement from the company. In the announcement the company said Eager had previously served as the company’s longest-serving director.

“He was highly respected for his technical knowledge, diligence and professionalism,” it said.

The American Federal Reserve has said it is ready to continue providing support for the economy, also noting fears about deflation.

“The committee … is prepared to provide additional accommodation if needed to support the economic recovery and to return inflation, over time, to levels consistent with its mandate,” it said in a statement.

The Dow Jones Industrial Average gained 7.41 points or 0.07% to 10,761.03.