Australian Dollar Outlook 26/11/2010
Australia: The AUD has opened slightly higher this morning, despite thin trading conditions with the Thanksgiving holiday in the US overnight.
The AUD regained its footing above USD0.9800 last night after falling through that level yesterday on the back of a host of reasons, including mixed domestic data, policy doubts in China and uncertainties in Europe and the Korean peninsula.
Trading ranges were extremely tight and lower liquidity levels meant that not much was really happening with the US out of the overnight session.
European stocks were modestly higher, buoyed by positive statements by German Chancellor Angela Merkel seeking to ease tensions over the euro-zone debt strains.
Today the market will focus on Reserve Bank of Australia's Governor Glen Stevens who will appear before the House of Representatives Standing Committee on Economics at Parliament House.
It's hoped that Mr. Stevens clarifies the central bank's position on leaving the cash rate unchanged in December.
Majors: The EUR ended the session modestly higher Thursday night as key officials with the European Central bank repeated assurances that Europe will stand together to protect its currency.
German Bundesbank President Axel Weber, an influencing voice on the ECB's governing council, said euro-zone countries have no alternative but to protecting the EUR.
Weber also commented that Spain is highly unlikely to need euro-zone aid.
His remarks echoed earlier comments from European leaders German Chancellor Angela Merkel and French President Nicholas Sarkozy who also urged quick action on an agreement providing Ireland with a financial bailout from the EU and IMF.
The EUR was pretty much supported by the comments however with thin trading conditions; it failed to make any major gains. There is no major data being released offshore Friday.
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