Bell FX Currency Outlook: The Australian Dollar has rallied on positive sentiment overnight amidst hopes the US will avoid their "fiscal cliff".
Australia: The local unit strengthened overnight as "risk assets" strengthened and recovered on some of the previous week's sharp losses. Comments from US President Barack Obama he believed a budget deal can be reached between over the fiscal cliff scenario that threatens to send the US back into recession, saw an improvement in risk sentiment overnight.
The Australian Dollar rallied back above 1.0400 against a weaker US dollar and is up against most majors this morning. Today the focus will be on the RBA Monetary Policy meeting minutes and the RBA Governor Stevens speech tonight. Markets will look for signs the RBA are considering a rate cut in December.
Majors: Wall Street extended a rally that began on Friday as US lawmakers indicated compromises were possible and both sides are willing to negotiate to avoid the "fiscal cliff" scenario. Traders pared back precautionary positions although remain cautious with details yet to be seen. Better than expected US housing data saw the S&P 500 gap higher in early trade to end the session 1.6% higher at 1,381.
The DJIA also closed 1.4% higher at 12,746. Optimism in Europe over the prospects of a deal this week to release much needed aid for Greece lent support and saw the Euro rally back to 1.2800 against the Greenback. Optimism over the US political negotiations saw European shares rebound from last week's lows with the FTSE ending 2.4% higher at 5,738 and the German DAX ending 2.5% higher at 7,124.
Gold prices were also stronger on the positive sentiment ending the session 1.1% higher at USD 1,733 an ounce. Tensions in the middle east with the Israeli Palestinian conflict escalating saw oil prices rise overnight with Brent closing 2.0% higher at USD 111.9 per barrel, and WTI futures rising 1.9% to USD 89.4 per barrel. Commodity and metals prices were all broadly stronger overnight.
20 NOV AU RBA Board Minutes NOV
AU RBA's Governor Stephens Speech on Economy
US Housing Strats & Building permits OCT
US Fed Governor Bernanke Speech NY
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