Bell FX Currency Outlook: The Australian Dollar has
opened slightly lower again this morning after talks
between Greece's political parties failed, which led to
safe haven interest in the US Dollar and adding to the
recent weakness in our own currency.
Australia: The AUD spent most of yesterday below parity against the
USD after first "breaking on through to the other side" on Monday as
Greece's situation worsened. Greece's main political parties have been
trying to form a government since last week's elections demolished the
ruling coalition. Division over austerity measures, imposed in order to
secure bailout funding from the European Union, have stalled negotiations
and Socialist party leader Evangelos Venizelos announced overnight talks
between the parties had broken down, meaning fresh elections will be held
next month. Expectations are that this is actually a good scenario as it is
expected the next election will provide a more definite result. Locally, the
Reserve Bank of Australia minutes didn't contain any hints of a follow-up
rate cut in June. Today sees the release of the Westpac Consumer
Confidence survey at 11.30am AEST in the wake of three things being 1)
the 0.50% RBA rate cut earlier this month, 2) last week's Budget and 3)
last week's better than expected labour market report for April. Also being
released is Q1 wages data with NAB forecasting higher than consensus.
After the moves in recent days we feel the AUD may have a bit of a rest
today, well at least until tonight's European session. Fair to say, as has
been the case since the GFC, keep a close eye on things.
Majors: The US Dollar did benefit from the uncertainty overnight caused
by Greece. This was after European GDP for Q1 surprised on the upside.
The euro zone avoided recession with no real change of note in activity in
Q1 on the back of the 0.3% contraction in Q4 2011. US Data shows
consolidation is still underway with the NAHB homebuilder survey rising
+29 in May, which is in line with leading manufacturing surveys that are
pointing towards consolidation after a good bounce in Q1. The Empire
manufacturing Index was stronger than expected and headline retail data
came in on par. Tonight sees the release of UK unemployment data for
April, US housing starts, and industrial production and towards the end of
the session, the minutes of the Federal Reserve's April 24-25 FOMC
meeting are reported to the market.
16 MAY AUS Westpac Consumer Confidence Index May
EU Euro-zone CPI Apr
US Fed Minutes from Apr 24-25 FOMC Meeting
An increasing number of people are trying more ways to sneak money out of countries that are buckling under the weight of financial crises.
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