Bell FX Currency Outlook: The Australian Dollar is trading close to the 1.0400 level after a fairly tight trading range on Friday night as markets evaluate the likelihood there will be some agreement before the "fiscal cliff" in the US is reached in January 2013.

Australia:With analysts weighing into the debate whether the Republicans and Democrats will be able to come to some agreement before the start of
mandatory spending cuts and taxation increases on January 2013, markets generally moved sideways on Friday with European equity indices slightly down or flat and the US indices seeing no change from the previous day.

President Obama said he continued to favour higher taxes for those earning over USD250k per year along with some spending cuts. S&P said there was a 15% chance that a deal would not be done before the automatic changes take effect. In addition, we are again approaching in the next several months a time when the US debt ceiling will have to be raised which as we know provided some dramas the last time this event happened.

The RBA's release on Friday of their Quarterly Statement of Monetary Policy did not cause much of a stir with the projected range of GDP growth for the next 12 months reduced by 0.25% from 3.5%-2.5% to 3.25%-2.25% as mining investment slows.

They believe their current monetary policy is "appropriate" for the current conditions although most analysts believe the cash rate will be lowered next month by 0.25% after being left on hold last week.

China released during the weekend better than expected industrial production, retail sales and export growth figures for October. Today in Australia, home and investment loan approval data for September will be released.

On Wednesday we will see some consumer confidence figures as well as Q3 wage price index figures.

Majors: Although fiscal cliff issues still dominate the financial news, Greece is not far out of the limelight as the Greek Parliament votes on
their 2013 budget. Last week there were further austerity measures approved that reduce pensions, wages and other government spending.

This week there is a EUR5bn payment due on their sovereign debt which looks likely to be made due to a bridging facility of EUR3.1bn since there
may be further delays on additional bailout funds to the country.

Generally, lower industrial production figures in France, Italy and Sweden added to the bearish tone of the EUR which continues to trade around the 1.2700 level to the USD. It isn't all bad news with the US University of Michigan consumer confidence survey for November rising to its highest level since July 2007 giving further evidence that consumers are feeling better about their general economic situation. Financial markets will be closed in the US today for the Veterans Day holiday while Canada celebrates Remembrance Day.
Economic Calendar
12 NOV AU Housing Finance Approvals
AU NAB Business Confidence
JP Prelim GDP q/q
JP Prelim Machine Tool Orders
US Veterans' Day holiday
CA Remeberance Day Holiday
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