Bell FX Currency Outlook: The Australian Dollar remains below 1.0400 following a surge in Spain's borrowing costs and protests against the country's austerity measures.

Australia: In the markets, gold fell moderately on renewed fears over the euro zone debt crisis. These fears were sparked by anti-austerity protests in Spain. The protests, described as "violent", pushed the Australian dollar, a barometer of global investor confidence, lower overnight.

An estimated 6,000 demonstrators clashed with police in Madrid in an angry protest against the austerity cuts and tax hikes aimed at alleviating the country's debt burden.

The Spanish government on Thursday will unveil its 2013 budget outlining further spending cuts. To add to this, an auction of Spanish debt saw the country's borrowing costs rise overnight, amid growing weariness among investors at the government's resistance to seek a sovereign bail-out from the European Central Bank.

The markets feel the nervousness surrounding the Spanish situation could well see the AUD test support levels on the downside today. Support at USD1.0380 has yielded so there may be a push lower. There are no key data releases or events in Australia today.

Majors: US economic data overnight was positive and continues to point towards modest growth, which is good news given the woes in Europe. The consumer confidence index jumped to a seven-month high in September but note that it still remains below average.

The rise was mainly driven by an improvement in the expectations index. The S&P/Case-Shiller house price index increased slightly in seasonally adjusted terms in July, the sixth consecutive monthly rise.

The Richmond Fed Manufacturing Index also beat expectations, rising to a five-month high, and the new orders index rose sharply and resulted in a rise in the ratio of new orders to inventories. Base metals prices were broadly stronger on Tuesday with copper rising 0.6% to USD8,255 per tonne on
positive US consumer confidence data.

These gains were moderated by concerns over the outlook for Chinese demand. Agricultural commodities prices were mixed overnight.
Economic Calendar
26 SEPT GE Consumer Price Index Sep
US New Home Sales Aug
US MBA Mortgage Applications Sep 21

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