Australian Dollar Outlook - 17 January 2013

Bell FX Currency Outlook: Australian Dollar edges higher ahead of domestic jobs data today.

Australia: The AUD traded in a tight range overnight finding some support as investment banks JP Morgan and Goldman Sachs posted better than expected fourth quarter profits.

The currency remains fixed in its recent trading range between 1.0530 and 1.0580 against the Greenback unaffected by yesterday's unchanged reading on Australian Consumer Sentiment.

Domestic employment figures due at 11:30am today will be closely watched to see if the dollar can break either above or below the range. Expectations are for the unemployment rate to push back up to 5.4% for December after the surprise dip to 5.2% in November.

Iron ore prices have seen a dramatic correction lower after their spectacular run from lows last year below $86.00 to recent highs above $158.00.

The run higher in the iron ore price has been seen to provide some support to the stronger AUD of late; a decline in prices could start to see a rift in that support.

Majors: US and European stocks overcame initial weakness from the Asian and European sessions and saw modest gains as JP Morgan and
Goldman Sachs reported above expected Q4 earnings.

A stream of US data was released overnight with headline CPI printing in line with expectations. The Beige Book noted that economic activity has expanded since then last release with all 12 districts describing modest or moderate growth.

The S&P 500 ended the session 0.1% higher after paring back earlier losses closing at 1,468, while the DJIA declined 0.2% to 13,511.

European equities also ended the session mixed with the German DAX gaining 0.2% to 7,691 while the FTSE fell 0.2% to 6,104. Oil prices were also mixed after a report showed US inventories had fallen.

WTI Futures rose 0.6% to USD 94.1 per barrel while Brent declined 0.3% to USD 109.7 per barrel. Commodities and metals prices were mixed though broadly lower. Tonight will see more US data released with Unemployment, Building permits and the Philly Fed Manufacturing Index due for release.
Economic Calendar
17 JAN AU Employment Change / Unemployment Rate
NZ ANZ Consumer Confidence Index
US Housing Starts / Building Permits
SP Spain to Sell Bonds

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