Bell FX Currency Outlook: The Australian Dollar shrugged off weaker domestic data and remained well supported opening back above 1.0500 against the U.S. greenback this morning after what was a lacklustre overnight session.
Australia: An evening of low volume and subdued movements saw the local unit end mostly unchanged, despite a disappointing Retail Sales read in the local session. Domestic Retails Sales for November again disappointed falling 0.1% m/m vs an expected +0.3%.
Today will see building approvals for November released at 11:30am. Figures are expected to show an improvement in line with increasing loan approvals figures.
In a market that is lacking momentum and with little fresh news to drive the currency either way, the AUD remains well supported. The rally in spot iron ore prices of late; which is starting to look overdone, coupled with still attractive yields are helping to support the currency.
Markets will focus on the Chinese December trade data due out today. Given the recent strength in iron ore shipments from Australia, an increase in imports is expected which should provide additional support for the AUD.
Majors: Positive earnings results from aluminium giant Alcoa buoyed equity markets in early trade overnight, as optimism increased a third consecutive year of growth in US Corporate earnings will be seen.
Investors have been concerned recent fiscal cliff worries and signs of slowing economic growth would weigh on earnings. The S&P 500 closed 0.2% higher at 1,460 whilst the DJIA rose 0.3% to 13,373.
European equities also ended the session higher with the German DAX gaining 0.3% to 7,720 and the FTSE gaining 0.7% to 6,099. Poor German data saw the EURUSD pare back as industrial production recovered by only 0.2% after the 2.0% drop seen in October.
Tonight markets will focus on Central Bank policy meetings for the ECB and Bank of England. Oil and gold prices ended the session little changed with Brent closing at USD 111.6 per barrel, while WTI futures gained 0.2% to USD 93.1 per barrel.
Gold was mostly unchanged at USD 1,657 per ounce. Commodity and metal prices were mixed with only minor moves at today's trade.
10 JAN AU Nov Dwelling Approvals
CH Dec Trade Balance
EU ECB rate decision
UK BOE policy decision
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