Bell FX Currency Outlook: The Australian Dollar remains well supported despite negative political headlines out of Europe.

Australia: The AUD found support overnight amid rising expectations for further stimulus measures in the United States this week. It traded within its recent narrow range and opened at 1.0480 against the Greenback this morning.

The AUD has held ground despite a stream of weaker domestic data and disappointing Chinese trade figures seen yesterday. China's
November trade surplus fell to $19.6bn from $32bn in October.

China's exports rose 2.9% y/y vs. an expected 11.6% y/y whilst imports, though marginally weaker remained flat. A recent rise in the iron ore price coupled with expectations of further stimulus from the US Fed have been key drivers for the resilience seen in the Australian Dollar.

The US Fed Reserve bond buying program "Operation Twist" is due to expire at the end of 2012. Expectations the US Fed will announce further easing are likely to dominate the AUD's movements over the next few days, however the dollar is expected to remain firm.

Today in Australia, the NAB Monthly Business Survey for November will provide the latest readings for business and consumer confidence, both of which have been subdued in recent months.

Majors: US and European markets made small gains despite early weakness as markets responded to news Italian Prime Minister Mario
Monte would step down. Comments from Monte that elections would produce a "highly responsible" government improved confidence, and saw European equities recover some ground.

The German DAX rose 0.2% to 7,531 while the FTSE rose 0.1% to 5,922. Improved confidence on the "Fiscal Cliff" negotiations helped support markets with US equities heading higher towards the close.

The S&P 500 ended 0.1% higher at 1,419 while the DJIA also ended the session 0.2% higher at 13,169. Gold prices strengthened following the resignation of the Italian prime minister ending the session 0.5% higher at USD 1,712 per ounce.

Metals were broadly stronger whilst commodities were generally weaker. Tonight, the German ZEW Survey is expected to show a small improvement in December, while Spain and Greece have bill auctions.

In the US, October trade data and the November small business optimism index are released.
Economic Calendar
11 DEC AU NAB Business Conditions / Confidence
US Trade Balance (Oct)
US Bank of England Governor King speaks
NZ Electronic Card Transactiaons

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