Australian Dollar Outlook - 06 December 2012

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By Christine Gaylican | December 6, 2012 10:46 AM EST

Bell FX Currency Outlook: Australian Dollar little changed in relatively quiet overnight session ahead of key employment data today.

Australia The Australian Dollar has opened slightly weaker as the USD gained ground after a reasonably quiet overnight session. The local unit opened at 1.0450 against the Greenback after trading to a low of 1.0442, shrugging off yesterday's weaker than expected GDP figure.

Australia saw its weakest quarterly growth since March 2011 as third quarter GDP was released below the expected 0.6% at 0.5%.

RBA deputy Governor Lowe commented overnight that "interest rates in Australia are lower than otherwise would be to offset an uncomfortably high AUD."

He also did not rule out currency intervention, although noted it would be a very significant step to take. Today will see domestic labour force figures for November released at 11:30am.

Markets will look to the data for guidance on Australia's monetary policy outlook and we expect volatility in currency. Expectations are for a slight rise in the unemployment rate for November.

Majors: US Equity markets received a boost overnight after comments from US president Obama that he will not allow the fiscal cliff debate to affect the necessity of raising the debt ceiling next year.

This comes after recent reports the Republican Party would use the upcoming battle to raise the debt ceiling and get their way on taxes in negotiations.

US data also printed fairly positive last night with Non-Farm employment increasing by 118k jobs and manufacturing rising 54.7 in November above the expected 53.5 and up from October's read of 54.2.

The DJIA rose 0.9% to 13,069 while the S&P 500 was 0.4% higher at 1,413. A decline in Apple shares weighed on the NASDAQ which declined 0.4% to 2,984.

The EUR declined from 7 week highs against the US Dollar as disappointing Eurozone Retail Sales, and a weaker than expected Spanish bond auction weighed on the currency.

European equities ended the session generally higher shrugging off the weaker data reads. The FTSE rose 0.4% to 5,892
while the German DAX rose 0.3% to 7,455.

The weaker Eurozone data weighed on oil prices with Brent falling 1.2% to USD 108.8 per barrel while WTI futures fell 1.1% to USD 87.9 per barrel.

Commodity prices were broadly stronger overnight with metal prices mixed as comments from the Chinese Communist Party Chief that policies will be fine-tuned next year to ensure stable growth.
Economic Calendar
06 DEC AU Nov Unemployment Rate/Change
EU Q3 GDP revision
EU ECB Rate decision
US Initial jobless claims w/e 1/12

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