Australian dollar falls to lowest level since January: Midday roundup

The Australian dollar has taken another step down towards parity with the US dollar, dropping more than 1 US cent on expectations of improving prospects of a recovery in the United States.

The local dollar fell to its lowest level since January, after the US Federal Reserve indicated it would not be taking action to further stimulate the American economy.

The local dollar is trading at $US1.0294, having fallen from an opening price of $1.0331 on the news.

On January 17, the Australian dollar hit a low of $US1.03.

Services sector contracts in March

The services sector contracted in March, according to the latest figures from the Australian Industry Group-Commonwealth Bank Performance of Services Index.

The index rose 0.3 points to 47 points, but was still below the 50-point level separating expansion from contraction.

“The high (Australian) dollar is thwarting the prospects for trade-exposed service businesses and a lack of confidence among households is holding back the retail sector and service businesses,” said AIG chief executive designate Innes Willox in a statement.

Shares flat after negative comments from US markets

The Australian sharemarket has opened lower this morning after comments from US Fed chairman Ben Bernanke that dashed hopes of further stimulus.

The benchmark S&P/ASX200 index was down 18.5 points or 0.4% to 4318.5 at 12.00 AEST.

Apple shares tipped to reach $1000

Apple’s share price was buoyed in overnight night trade after three brokers issued bullish comments on the tech giant’s prospects, with one of the three tipping its stock could hit the $1000 mark in the next two years, according to Dow Jones Newswires.

Analysts for Piper Jaffray and JP Morgan lifted their price targets on Apple before the US market open last night, which saw its stock rise as high as 1.7% to $US628.88 in morning trading.

The company’s shares are now over 55% higher since January 1.

“We believe shares of Apple will reach $1000 in 2014, which would imply a roughly $1 trillion dollar market cap, the first in history,” Piper analyst Gene Munster wrote in a note to clients.

Australia in trade deficit

Australia has posted a trade deficit in February, against expectations, according to data from the Australian Bureau of Statistics.

According to the figures, Australia’s trade deficit for the month of February was a seasonally adjusted $480 million, a fall of $491 million on last month.

Analysts had forecast a surplus of close to $1 billion for the month.

QBE’s profits are up and claims down

QBE Insurance Group today confirmed its 2012 insurance profit margin target of 13% or better and said that catastrophe claims for the first quarter were $US700 million less than the same period last year.

QBE has described 2011 as one of the worst years for catastrophic events, contributing to a 45% fall, to $US704 million ($683.79 million), in its net profit for the year.

QBE shares were recently up 19 cents, or 1.4%, to $14.09.