Bell FX Currency Outlook: The Australian Dollar traded in a narrow range on Friday night as it consolidated its position after its strong run through .9700 last week.
Australia: The AUD traded in a fairly tight range after the release of some better than expected figures from the US economy although consumer confidence took an unexpected dip.

Equity markets continued to be firm especially in the US where earnings results from Microsoft and Amazon exceeded expectations. The S&P 500 hit another record high as gold was slightly higher as well. In general, expectations are increasing that the US

Federal Reserve will delay any tapering of security purchases well into 2014 now as the strength of the economic recovery is uncertain.

Locally, most analysts have ruled out any decrease in the cash rate locally when the RBA meets next Tuesday as general confidence seems to building some of which is related to the steady increase in house prices in most of the major Australian cities.

Late last week the local debt ceiling was raised from $300bn to $500bn as it appears the projected federal budget deficit for this year will reach $30bn, up from the $18.8bn figure for 2012-13.

This week will see RBA Governor Stevens speaking tomorrow and on Thursday some building approval figures along with new home sale figures, import/export prices and private sector growth numbers will be released. We expect the AUD may drift to lower levels over the next few days although we expect any fall to be modest.

Majors: The final read on US consumer confidence for October from the University of Michigan took a hit with the index declining to 73.2 from its previous level of 75.2. Durable goods orders were 3.7% higher for September while inventories grew by 0.5%; both figures were higher than expected although capital goods figures were slightly lower than originally thought.

The two- day FOMC meeting begins on Tuesday and again all eyes will be on their statement regarding the future of bond purchases and continued monetary policy stimulus.

The RBNZ meets on Thursday where it is expected they will keep their 2.5% cash rate at the same level as the new restrictions on home lending in New Zealand work their way through the economy.

Today New Zealand is closed for the Labour Day holiday. In the UK, the first print of Q3 figures for their GDP came in at 0.8% qoq
and 1.5% yoy which was in line with predictions. The EUR continues to maintain its 1.3800 level versus the USD as German IFO business sentiment fell slightly by 0.3 to 107.4.
Economic Calendar
28 OCT NZ Public Holiday
US Industrial Production Sep
US Pending Home Sales Sep
US Former Fed Governor Speaks at Economic Club of Canada

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