Bell FX Currency Outlook: The Australian Dollar is trading at USD 1.0380 this morning. The major news was the White House / Senate 'deal', and this saw the NZD rally yet interestingly, the AUD underperformed relative to the NZD, GBP and CAD.
The NZD outperformed the AUD with the recent news from the U.S. that the Senate has approved a fiscal resolution.
From here, it will be fascinating to see if the AUD's strength in December returns. Traditionally, for reasons unknown to most,
January is a month where the AUD performs quite well. This week will focus on Washington. We expect a subdued day in the local markets today.
Majors: The USD Dollar was mixed and US equities staged a strong rebound on New Year's Eve in the wake of a deal approved by the Senate and with the blessing of the White House to at least temporarily avert much of the fiscal cliff.
The Senate approved the deal 89-8 late on Monday. It is not yet known when the House of Representatives will submit the deal
to the floor for a vote, or whether they will propose an amended deal to be submitted back to the Senate. Most believe the Senate-approved deal will not get approval by the House in its current form.
The debt ceiling has not been addressed, but will need to be within 6-8 weeks, by which time the government can no longer pay its way (according to estimates from Treasury Secretary Geithner before Christmas) alongside the spending issues left untouched in the Senate version of the bill, known as the 'Taxpayer Relief Act'.
Markets are now left in abeyance pending the fate of the Taxpayer Relief Act so it's now to the vote of the House on the bill.
2 JAN AU Dec AiG PMI
EU Dec PMI manufacturing final
GE Dec CPI %yr prelim
US Dec ISM manufacturing