australian dollar outlook 22 august 2011

FX DAILY REPORT MONDAY 22ND AUGUST 2011 BELL POTTER SECURITIES LIMITED GPO BOX 4718 MELBOURNE VIC 3001 AUSTRALIA TOLL FREE 1800 003 815 [email protected] WWW.BELLPOTTER.COM.AU ABN 25 006 390 772 AFS LICENCE NO.243480 Bell FX Currency Outlook Volatility remained the order of the day on Friday, as major equity markets all moved lower, which kept the AUD under selling pressure. Australia: Fears of a double dip recession in the US and very low growth in Europe have pushed the AUD down from the high 1.0400’s to the high 1.0300’s this morning. The AUD has held up fairly well in the light of further equity market weakness that saw all major indices fall again on Firday. With major European indices falling 1% (FTSE 100) to 2.2% (the German DAX and Euro Stoxx 50), the trend continued in the US, with the Dow off another 1.6% to 10,817, the S&P 500 1.5% to 1,124 and the NASDAQ 1.6% to 2,342. With turmoil everywhere in equity markets, gold hit a new record high of US$1,878 an ounce for its biggest weekly gain since 2008. The oil price (Brent) was up in Europe but slightly down in the US (WTI crude) as the gap between the two indices has widened to its highest level ever (US$26 a barrel). There is not a lot of data being released this week in Australia with the highlight being Wednesday’s release of Q2 construction data, although speeches by RBA Deputy Governor Battellino (Tuesday) and Governor Stevens (Friday), might give a further indication on the likely path of local interest rates. Majors: With the USD trading at a post WWII low against the JPY on Friday (USDJPY sub 76), it is thought there is a strong possibility that the Bank of Japan will intervene in the market on its own bat to weaken the JPY in a similar fashion to the actions taken by the Swiss National Bank on the CHF recently. The European sover eign debt crisis continues to bubble along in the background with Germany rejecting supporting an ECB Eurobond issue that has been discussed in the last several weeks. Later this week the eyes of the market will focus on the annual US Fed Reserve conference in Jackson Hole, Wyoming where Fed Chairman Bernanke may provide guidance to the market of the possibility of another round of further quantitative easing. Bell FX Announcement: We would also like to congratulate Rebecca for becoming a Mum on Friday when she and Ashley welcomed Sabrina Ruby into the world. Everyone is well and all is good. Economic Calendar 22 AUG US Chicago Fed National Activity Index JUL US MBA Mortgage Delinquencies Q2 23 AUG CH HSBC Flash Manufacturing PMI AUGCA CPI JUL AU RBA Deputy Governor Battellino Speech Important Disclaimer – This may affect your legal rights: This publication has been issued on the basis that it is only for the information and exclusive use of the particular person to whom it is provided by Bell Potter Securities Limited trading in the foreign exchange markets as Bell Foreign Exchange (ACN 004 845 710). As this publication is a private communication to clients, it is not intended for public circulation or for use by any third party, without the prior approval of Bell Foreign Exchange. The Information contained in this publication has been obtained from sources considered and believed to be both reliable and accurate, and no responsibility is accepted for any error or omission, that may have occurred, or for any opinion expressed. The Information is general in nature, and does not take into account, the particular investment objectives or financial situation of any potential reader. It does not constitute, and should not be relied on, as financial or investment advice, or recommendations (expressed or implied), and is not an invitation to take up securities or other financial products or services. No decision should be made on the basis of the information without seeking expert financial advice. Ranges in this publication are indicative ranges over the past 24 hours. Last is around 9.00am Sydney. Please speak with Bell Foreign Exchange if you require l atest pricing and ranges. Kimberly Limbert 08 8224 2725 [email protected] Bill Giffen 02 9255 7473 [email protected] Sally Fisher 08 8224 2771 [email protected] Geoff Louw 02 8243 3502 [email protected] Nick White 08 8224 2770 [email protected] Bronson Livingston 02 8243 3503 [email protected] Scott Fleming 03 9235 1912 [email protected] Tracey Warren 02 9255 7294 [email protected] Stephen Blampied 03 9235 1960 [email protected] Scott Hill 02 8243 3504 [email protected] Australian Dollar / US Dollar 0.60 0.70 0.80 0.90 1.00 1.10 1.20 Oct-05 Oct-06 Oct-07 Oct-08 Oct-09 Oct-10 Oct-11 Today’s Forecast Range USD 1.0275-1.0425 Currencies Last High Low AUD / USD 1.0370 1.0481 1.0315 USD / JPY 76.85 76.93 76.32 EUR / USD 1.4360 1.4405 1.42559 GBP / USD 1.6470 1.6539 1.6422 NZD / USD 0.8175 0.8326 0.8170 AUD Crosses Last High Low AUD / JPY 79.70 79.78 78.82 AUD / EUR 0.7210 0.7237 0.7206 AUD / GBP 0.6290 0.6326 0.6281 AUD / NZD 1.2685 1.2731 1.2533 AUD / CAD 1.0275 1.0309 1.0264 Australian Rates Last Previous Official Cash 4.75 3 Month Bill 4.81 4.82 10 Year Bond 4.23 4.36 US Rates Last Previous Fed Funds 0.25 3 Month Libor 0.303 0.298 10 Year Bond 2.060 2.060 Commodities Last - / + (%) Gold (US$ / oz) 1852.55 1.6 Oil (WTI) US$/bbl) 82.26 -0.1 CRB Index 329.47 0.9 Equities Last - / + (%) ASX 200 4,102 -3.5 Dow Jones 10,817 -1.6 FTSE 5,041 -1.0 Hang Seng 19,400 -3.1 Nikkei 8,719 -2.5

australian dollar outlook 22 august 2011

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