Australian Dollar Outlook - 29 August 2013
Bell FX Currency Outlook: The Australian dollar is slightly higher this morning as investor play down tensions over a possible US air or missile strike on Syria.
Australia: The US government is believed to be planning an attack as punishment for the Syrian government using chemical weapons on its own civilians. In the last couple of days, the AUD and global share markets have given up ground because of the tensions however last night saw US equity markets edge higher with a 0.3% gain for the Dow and S&P 500.
The energy sector led the gains with a 1.2% increase, whereas airline stocks were hit amid fears of higher fuel prices. With concerns building that there may be oil supply disruptions in the Middle East, oil prices rose further overnight and gold eased slightly.
A slightly softer USD saw a slight recovery in the AUD but we don't see much more price action today in this regard. In Australia today, Q2 CAPEX data will be released at 11:30AEST with the moan focus being non-mining firms' investment intentions for
2013-14 with expectations of further weakness ahead in mining investment, particularly from mid-2014.
Majors: As stated above, currency markets were fairly contained, given persisting concerns over a military strike on Syria. In fact AUD and NZD are largely unchanged over the past 24 hours, despite strength in the USD against major currencies such as the JPY and EUR.
Short-end UK interest rates fell ahead of Governor Carney's maiden speech but yields quickly reversed earlier moves as the Governor was less dovish than expected.
While taking the opportunity to clarify the BOE's new forward guidance, Carney also sounded a little more optimistic on the UK economic outlook.
Offshore, Japanese retail sales for July are released this morning, while tonight in the US, Q2 GDP is expected to be revised up to 2.2% from the earlier estimate of 1.7%, while jobless claims are expected to fall to 331K last week from 336K.
Economic Calendar
29 AUG AU Private Capital Expenditure 2Q
JN Retail Sales MoM Jul
US GDP Annualised QoQ 2Q
US Initial Jobless Claims 23 Aug
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