Bell FX Currency Outlook:

With the majority of offshore equity markets and commodity markets in the US closed for the New Year's holiday, the AUD is remaining steady around USD1.0200 level in thinly traded markets.

Australia: Locally there isn't anything that we expect to be market moving this week, with the AUD taking cues from the equity markets as well as some significant data releases out of the US later in the week. These include the ISM Manufacturing, and the FOMC minutes which are due out tonight, as well as the US employment data on Friday night.

As trading volumes continue to grow as the week progresses, we could see a little risk appetite return to the markets, and as a result, a rally in the AUD, after the successful bond auctions in Italy last week; although we may need to see more from Europe than just a positive auction result.

Majors:

In the markets that were open last night, it seemed that positive manufacturing data was the flavour of the session, with Chinese, Indian and German manufacturing all surprising on the up-side. Germany's result did little for the EUR as it fell against the USD slightly.

After the EUR slumped to a 15month low against the USD last week, it could go either way in the coming weeks. We expect that the next big event for this currency pair is an expected meeting between German Chancellor Merkel and French President Sarkozy on January 9th, with markets looking for increased cooperation in addressing the Euro-Zone crisis.

Economic Calendar
03 JAN AU Aust AIG Manufacturing PMI
CH Chinese non-manufacturing PMI
SG Singapore GDP
US FOMC Dec minutes