Bell FX Currency Outlook: The Australian Dollar has started the week's trading at similar levels to the end of last week with no major announcements occurring over the weekend.

Australia: After the recent volatility we have come to expect both currency and equity markets moved little on Friday night with the AUD poking its head above 1.0500 briefly. US equity markets were virtually unchanged on Friday while the major European indices fell slightly with the Euro Stoxx down by 0.9% and the German DAX falling 0.8%.

Commodity prices were in general mixed with lead, nickel and aluminium slightly up while copper did not move and zinc, iron ore and thermal coal all fell slightly.

WTI crude continued its downward path of the last week finishing at US$92.90 a barrel while gold rose just a touch to US$1,773 an ounce. There is not much news flow scheduled for Australia this week with the RBA's bi-annual Financial Stability Review due on Tuesday and on Friday we will see the release of private sector credit growth where the market is predicting an increase of 0.3% month on month.

More attention is being focused on the RBA's rate decision next Tuesday, October 2, and more analysts are predicting a decline of 25bps in the 3.50% cash rate as lower commodity prices have effectively tightened monetary conditions leading to potentially lower growth and higher unemployment over the coming months. Most market analysts are predicting a move of 25 bps downward in November as well.

Majors: In the Eurozone, there is speculation that Spain will seek a bailout package in the near future but in three days' time (September 27) the 2013 budget is going to the Spanish Parliament which may be the precursor for financial assistance. On October 8, the next Eurozone meeting is scheduled and in the very near term we should hear about the specific plans to recapitalise the Spanish banking system.

Volatility of the EUR is likely to increase over the next several weeks as eyes are refocused on Spain and its economy. The Swiss National Bank has pledged to take further action to cap the rise of the CHF which has risen above its "peg" of 1.20 to the EUR to 1.21 recently. Later this week from the US we will see regional manufacturing data, house prices and home sales data along with capex, consumer confidence, and income and
spending data for September.
Economic Calendar
24 SEPT JN BoJ August Minutes
US Dallas Federal Manufacturing Activity Index Sep
UK Nationwide House Prices Sep
GE IFO Business Climate and Expectations Sep

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