Dollar hits 13-month low on European crisis, Shares slide: Midday Roundup

The Australian dollar has hit a 13-month low this morning after Greece released new economic forecasts, confirming that it won’t be able to fulfil deficit forecasts either this year or next.

The Australian dollar is now at US95c, the lowest point since September 2010.

The sharemarket has also fallen 1.4% this morning after disappointing leads from the United States, where stocks also fell due to fears over European debt.

The benchmark S&P/aSX200 index was down 55.3 points or 1.4% to 3841.7 at 12.00 AEST, while in the United States, the Dow Jones Industrial Average fell 2.4% to 10,655.3.

AMP shares lost 1.59% to $3.72, while Commonwealth Bank shares fell 1% to $43.44. NAB lost 1.71% to $21.26 as Westpac lost 1.74% to $19.16.

Greece cannot default, Eurozone pledges

Luxembourg Prime Minister Jean-Claude Juncker has said that a Greek default cannot occur, even though the country has said it will miss deficit targets.

Juncker said following a meeting of Eurozone finance ministers that a decision about a loan would come sometime this month.

“We had no one advocating a default for Greece,” he told reporters. “Everything will be done to avoid that and it will be avoided.”

The admission comes despite Greece saying that it would miss deficit targets, casting doubt over the viability of more bailouts.

Australia records bigger than expected trade surplus

Australia has recorded a larger than expected trade surplus, according to the latest figures from the Australian Bureau of Statistics.

The figures show the balance on goods and services was a surplus of $3.1 billion during August, seasonally adjusted, up from $1.81 billion during July.

The forecast from economists had been for a surplus of $2 billion.

Building approval figures higher than anticipated

Building approvals rose during August, on a seasonally adjusted basis, in a higher than expected outcome according to the latest figures from the ABS.

The figures show that approvals rose by 11.4%, after increasing 1.8% during July. Aanalysts had expected a 2% increase.

Sundance board recommends takeover bid

The Sundance Resources board has recommended a takeover bid from Chinese group Hanlong Mining, with the offer representing a 63% premium on the average share price over the past month.

“After careful consideration, the Sundance board has unanimously concluded that the offer represents an attractive price and provides shareholders with an opportunity to realise considerable value from their investment in Sundance,” chairman George Jones said in a statement.

The company’s share resumed trading this morning, jumping 9.3% to $0.47c.

S&P confirms Britain’s credit rating

Standard & Poor’s has confirmed Britain will retain its AAA credit rating, with the country maintaining a stable outlook.

“Standard & Poor’s Ratings Services today affirmed its ‘AAA’ long-term and ‘A-1+’ short-term sovereign credit ratings on the UK. The outlook remains stable,” the company said a statement on Monday.

“In addition, we view the UK as having deep capital markets with strong demand for long-dated gilts by domestic institutional investors. There is also demand from non-residents for sterling-denominated UK government debt, which provides some diversification to the UK’s investor base.”