Bell FX Currency Outlook: The Australian Dollar remains under selling pressure this morning, following downgrades to global growth forecasts, as well as concerns ahead of forthcoming quarterly earnings season in the US.

Australia: Global markets were generally lower, amid fears of a poor quarterly earnings season in the US, which unofficially kicks off today. The
markets are concerned a weak earnings season could make global recovery more difficult in the months ahead. Stock markets were weaker in
Europe and the US and many currencies were also lower against the Greenback.

Yesterday's main highlight was The International Monetary Fund's (IMF) downgrading of its global growth forecast. The IMF lowered their 2012 forecast to 3.3% from 3.5% and its 2013 expectation to 3.6% from 3.9%.

RBA Deputy Governor Phil Lowe spoke yesterday and said a softer labour market and deteriorating global outlook drove the October rate cut in Australia. He added there was no sign of 'exuberance' in the housing market and he said a pick-up in housing construction could provide jobs as mining investment peaked.

The NAB Business Survey for September was released yesterday and showed broadly weaker activity business conditions. The markets are feeling the RBA is very much looking at a second 0.25% cut in November, several months forward from the previously favoured February.

In Australia today, the Westpac Melbourne Institute Consumer Confidence Index is due for release (the survey was conducted last weekend after the RBA rate cut). Whilst the downward pressure on the AUD is becoming a more familiar backdrop, there could be a "corrective" squeeze and re-test of 1.0450. Ultimately, the markets are calling the AUD to depreciate on the back of weaker macroeconomic fundamentals.

Majors: The US Dollar was again slightly firmer after the release of the IMF's semi-annual global outlook. As stated above, most currencies were somewhat weaker. Chinese iron ore prices were up a whopping 6%.

Oil prices rose overnight over Iran's nuclear programme and there is mounting concern about the Syrian situation in regard to supply disruptions in the Middle East. Spot gold prices fell overnight for the third consecutive session. Base metals prices were weaker across the board whilst agricultural commodities prices were mixed.

Offshore, attention will continue to focus on Greece and Spain. Meanwhile, in the US, the Federal Reserve's Beige Book Report is due.
Economic Calendar
10 OCT AUS Westpac Consumer Confidence Oct
CH Business Climate Index
US Fed release Beige book Economic Survey

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