Bell FX Currency Outlook: The Australian Dollar has
continued its run higher overnight reaching six week
highs, as US dollar weakness and global factors
continue to drive the AUD higher.
Australia: The AUD traded to a high of USD1.0440 against the
Greenback and notched its tenth consecutive week of gains against the
beleaguered Euro climbing to a fresh high of EUR0.8500 overnight.
Investors have started to reduce expectations this week that the RBA will
cut rates again at its August meeting. Comparing with the near-zero
interest rates in the US, Japan and the Eurozone, the carry trade is very
much alive and contributing to the rise of the local currency. Today sees
the release of local import prices at 11:30am.
Majors: Weaker US data released overnight has prompted more talk
about the possibility of quantitative easing or (QE3) for the US. 386,000
initial jobless claims were filed; up from the 365,000 expected.
Manufacturing data also disappointed at -12.9 vs. an expected -7.9. US
equities rose for a third straight day as earnings from technology
companies and expectations for stimulus outweighed the weak economic
data. Both DJIA and the S&P finished up 0.3% at 12,943 and 1,377.
European equities also traded higher with the FTSE 100 closing up 0.5%
to 5,714 and the German DAX ending 1.1% higher at 6,758. Rising
concerns over the political unrest in Syria and its implications for oil supply
has driven oil prices higher with WTI futures closing 1.8% higher at USD
92.19 per barrel and Brent closing 1.5% higher to USD 107.52 per barrel.
Gold prices also ended the session higher closing up 0.2% to USD
1,581.20 per ounce.
20 JULY AU Export / Import Price Index Q2
CH MNI Flash Business Sentiment Survey JUL
UK Public Sector Net Borrowing JUN
CA CPI JUN
Australian households are rationalising their expenditures, prioritising essential services and leaving out goods that a central bank official said led to “very subdued trading conditions in many parts of the retail sector.”
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