Bell FX Currency Outlook: The Australian Dollar had a very quiet night with markets noticing the effect of the traditional summer holiday periods in the Northern Hemisphere.

Australia: The Australian financial markets will study the minutes of the Reserve Bank of Australia's August meeting, but as far as currency goes, it is debateable how much discussion will focus on the high level of the AUD.

If there is comment, particularly on the strength of the AUD, and the suggestion that the high level is already having a negative impact on the economy, it is felt such comments will be of limited impact because the markets have taken this on board.

That said, it will be interesting to see more detail pertaining to the decision to keep rates on hold at the last meeting. Today also sees the CBA-HIA Housing Affordability Index which has recently shown improvement.

This has coincided with a pick-up in housing market activity which may lead to a positive outlook for housing construction, a key employer in the Australian economy. As far as our AUD is concerned, we believe it will weaken over the medium term to
correlate more closely with traditional fundamentals.

Majors: Globally, most markets are trading with little direction. Meetings are scheduled in Europe this week. On Thursday the German and Greek Finance Ministers are meeting with some discussion about a possible Greek exit.

The Bundesbank remains against ECB purchases of peripheral Government bonds but the ECB is stating that no decisions have been taken by the Governing Council.

Grain prices continue to soar on the back of the USA's drought. On commodity markets, WTI oil was flat and LME Base metals fell marginally. The US share market stocks was flat and the NZ Performance of Service Index (Jul) was steady.

The Japan Leading Index (Jun) was up from last month and beating market forecasts whilst the US Chicago Fed National Activity Index for June was down marginally.

Tonight sees a Spanish Treasury Bill auction and in the UK, the public sector financial data is due for release. In America, the Fed
Governor's Lockhart is speaking in Atlanta and this will be watched as he is a voting member of the FOMC at the Federal Reserve.
Economic Calendar
21 AUGUST AU Reserve Bank Board Minutes
UK Public Sector Net Borrowing
UK CPI Trends Total Orders
US Fed's Lockhart Speaks In Atlanta

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