Bell FX Currency Outlook: The Australian Dollar is softer this morning as the brinkmanship between the Republicans and
Democrats continues as a potential government shutdown on October 1 becomes more of a possibility.

Australia: Today the AUD has opened around the .9300 level after the US House or Representatives passed a bill over the weekend to avert a government shutdown related to the debt ceiling being reached and extending government funding until December 15 in exchange for a one year extension to the beginning of the new health care law that is also scheduled for Tuesday.

This bill has no chance to pass the US Senate where the Democrats have more influence. This week will see a raft of data from the major economies starting today where we will see private sector credit data for August in Australia where it is expected to have grown by 0.4%.

Tomorrow we will see retail sales for last month and the RBA's announcement on interest rates where no change is expected in
the 2.5% cash rate although we expect that the RBA will reiterate that the AUD is still too high and there remains scope to further ease monetary policy.

Later today and tomorrow we see more PMI manufacturing data from China. A national holiday in China begins tomorrow and extends through the week. Locally, the debt rating for South Australia has been moved one notch lower by Fitch bringing it in line with S&P's earlier move.

Majors: In the short run, news from the US will be focused on the potential US government shutdown which is estimated to potentially occur on October 17 when it is estimated funds will run out.

Bubbling along in the background is the issue of when the US Fed will begin to taper. With 10 different speeches scheduled this week by various Fed members including Chairman Bernanke this issue will continue the grab the headlines.

Italy has again come into the news with Berlusconi's supporters threatening to resign and putting the coalition government in doubt if he is tossed out of Senate. Italian bond yields rose and the EUR came off its highs after this information. In the UK we will see
September's PMI data tomorrow where we expect the recent upward momentum to continue. On Thursday the ECB will meet and we expect no change in their monetary policy while the week finishes up with the all important US jobs data where most expect the growth in jobs in the US will continue with an increase of 180k.
Economic Calendar
30 SEPT AU Private Sector Credit
CH HSBC/Market Manufacting PMI
NZ Building Permits

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