Bell FX Currency Outlook: US Fed Stimulus hopes take a back seat as concerns over the health of the domestic mining industry, and weaker Chinese data weigh on the Australian dollar.

Australia: The US Federal Reserve policy minutes initially boosted the Australian Dollar on Wednesday night as the FOMC signalled another round of stimulus could be delivered if the US economy does not show substantial signs of improvement.

The currency began to weaken yesterday afternoon and pulled back to USD1.0430 against the Greenback overnight, as the Chinese HSBC flash Manufacturing PMI data showed a decline from 50.9 in July to 47.9 in August - signalling more monetary and fiscal stimulus may be needed to secure a second half rebound in Chinese economic growth.

Sentiment was also dampened as Australian miner BHP Billiton announced its plans for the $A28 billion Olympic Dam expansion have been shelved.

Today will see RBA Governor Glenn Steven speaking in the House of Reps. Markets will watch for any comments pertaining to the high Australian Dollar, although the focus of the speech is to be the mining investment pipeline.

Majors: Overnight Eurozone flash PMI data added to weaker sentiment, as numbers pointed to a further contraction for the troubled euro zone economy in Q3. German numbers showed a contraction in bother manufacturing and service sectors. European equities generally declined with the German DAX ending 1.0% lower at 6,950 and the FTSE ending unchanged at 5,777. The EUR was buoyed by speculation the Spanish Government was in discussions for an impending bailout - which was later denied.

Comments from New York Fed President Bullard added to a strengthening US dollar, as he highlighted that the FOMC minutes are
based on three week old information and a strengthening in recent US data releases means additional stimulus is not required. US equities generally declined with the Dow Jones falling 0.9% to 13,057 and the S&P 500 ended the session 0.8% lower at 1,402.

Concerns over the European economy weighed on oil prices with WTI futures falling 2.2% to USD 95.99 a barrel, while Brent futures fell 1.2% to USD 114,55 per barrel.
Economic Calendar
24 AUG NZ Imports / Exports JUL
AU RBA Govenor testifies to House Economics Committee
UK GDP Q2
US Durable Goods Orders JUL

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