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USD Mixed as Foreign Demand for U.S. Assets Softens in April

By Tzu-Wen Chen
15 June 2012 13:19 GMT

THE TAKEAWAY: [U.S. Net Long-Term TIC flows rises less than expected in April] > [Demand for treasury bonds remains strong amid risk aversion] > [AUDUSD mixed]

Easing foreign demand for U.S. financial assets in April surprised many economists. According to the Treasury International Capital (TIC) statement, released today by the U.S. Department of the Treasury, long-term net purchase of U.S. assets rose to $25.6 billion in April. March’s estimate was revised slightly downwards to $36.0 billion from $36.2 billion initially reported. The median forecast of five economists polled in a Bloomberg News survey had called for net buying of $45.0 billion.

Net buying of U.S. treasury bonds and notes climbed to $37.3 billion in April from $20.1 billion in March, as investors sought safety in the U.S. bond market amid heightened uncertainty stemming from the euro debt crisis and concerns of a softening Chinese economy.

AUDUSD 1-minute Chart: June 15, 2012

USD_Mixed_as_Foreign_Demand_for_U.S._Assets_Softens_in_April__body_Picture_1.png, USD Mixed as Foreign Demand for U.S. Assets Softens in April

Chart created using Market Scope – Prepared by Tzu-Wen Chen

Trading of the greenback against the higher-yielding, risk-correlated Australian dollar was mixed following the data release. At the time of this report, the AUDUSD pair was trading at $1.0024.

--- Written by Tzu-Wen Chen, DailyFX Research

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15 June 2012 13:19 GMT