Bell FX Currency Outlook: The Australian Dollar has opened slightly firmer this morning but trading ranges overnight have been very tight due to the US Thanksgiving holiday.
Australia: The Australian Dollar received a slight boost yesterday afternoon after the Chinese HSBC flash manufacturing PMI data for November was better than expected. The reading of 50.4 was the highest in 13 months and indicates the Chinese economy will be on an expansionary path.
A reading of over 50 indicates expansion. With the ceasefire between Israel and Hamas taking effect and also better than anticipated flash PMI data out of Europe, financial markets were modestly more positive.
With tensions calming a bit in the Middle East the price of oil fell slightly while gold remained at its previous level of US$1,730 an ounce.
With the US markets closed, eyes were focused on Europe where the major equity indices all rose modestly with the German DAX up by 0.8%, the Euro Stoxx 50 up by 0.6% and the FTSE also higher by 0.7%.
We expect the AUD to trade in a narrow range today and overnight since most financial markets today in the US will operate under shorter hours.
In addition, Japanese markets are closed today for a public holiday.
Majors: The European Union's budget meeting is in full swing at the moment with all participants pushing their own country's point of view.
With the UK PM David Cameron saying "we are pushing very hard for a good deal for Britain's taxpayers" and Italy's PM Monti saying "it's absolutely necessary that Italy obtain better results than those under negotiation", the scene is set for some verbal jousting over the next few days.
In the midst of all of this Spain sold almost EUR4bn of 5 year bonds yesterday with yields under 5% overnight. It is estimated that the country will have to raise another EUR20bn of new debt next year over the EUR186bn of bonds they have issued this year in order to fund their increasing budget deficitEconomic Calendar23 NOV CH MNI Flash Business Sentiment IndicatorGE 3Q GDP QoQ/YoYGE Nov IFO Business climateGE Nov IFO ExpectationsUK Oct Home loan approvals
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