Australian Dollar Outlook - 02/11/2012

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By Christine Gaylican | November 2, 2012 1:03 PM EST

Bell FX Currency Outlook: The Australian Dollar is stronger on improved global sentiment due to positive economic data released in the US and China.

Australia: Commodity currencies outperformed last night with better-thanexpected US economic data releases supporting an upbeat tone. In an interesting development, the US Dollar was firmer against low-yielding major currencies (JPY, EUR, GBP) but weaker against high-yielding currencies.

Sentiment began to improve on yesterday's Chinese manufacturing data and this mood continued with US data which highlighted there were 158k new private sector jobs added to the US market in October, according to the ADP payrolls report released yesterday.

We see a quiet day locally heading into the weekend with the AUD likely to hold these gains and with markets turning their eyes to the US labour market report tonight. The ADP report is a new and improved private sector payrolls report and is designed to have a stronger relationship with the non-farm payrolls.

The better global data could lower expectations that the Reserve Bank of Australia (RBA) would cut the cash rate when it meets next Tuesday, following a cut at its previous meeting. In Australia today, Q3 producer price index (PPI) data are released at 11:30AEDT.

Majors: As stated, the US Dollar was bid against most "non" commodity currencies in a night which was a a healthy session on the global economic front.

Chinese manufacturing has seemingly stabilised and the tone of the US economic reports on consumer confidence, on manufacturing, and the high frequency labour market reports ahead of payrolls tonight all showed some improvement.

Oil prices were mixed overnight and spot gold prices fell modestly as the USD firmed and the markets wait for the data tonight.

Base metals prices were broadly stronger and agricultural commodities prices were mixed. The focus is on tonight's US non-farm payrolls, to emerging estimates of the economic and business fallout from Hurricane Sandy. Next week, analysts await the RBA Board meeting and the results of the tight U.S. presidential election on Tuesday.
Economic Calendar
2 NOV AU Q3 Producer Price Index qtr%
EC Oct PMI Factory Final
EC Oct PMI Construction
US Oct Nonfarm payrolls
US Oct Unemployment Rate
US Oct ISM New York

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