Bell FX Currency Outlook The Australian Dollar has moved slightly higher against the US Dollar following the aftermath of Hurricane Sandy's assault on the US eastern seaboard.

Australia: It was a second consecutive night of very thin trade as Hurricane Sandy wreaked havoc in the upper eastern seaboard of the US.

For the first time in history, the New York Stock Exchange has been closed 2 nights in a row and is currently scheduled to open Wednesday, despite the floor being underwater.

Yesterday, the RBA Deputy Governor Phil Lowe delivered a key note speech titled "Australia and the World Economy". He said the economy was in good shape despite the high currency. He added he didn't feel the currency was not fundamentally overvalued. There are many in the business sector who would beg to differ with this.
However, Mr. Lowe did say rate cuts can help counter the impact of a high-valued currency and added intervention would only be considered "in extremis" which suggests active and overt intervention is not exactly around the corner.

He did not talk about recent CPI data but noted lower interest rates have led to a slight improvement in the property market, and continued to say the appetite for debt is still low with further household deleveraging being evident. This leads many to believe if household borrowing does not pick up then the RBA will be able to cut rates further.

Today, the market will focus on Australian building approvals and private-sector credit data for September which are released at 11:30 AEST.

Majors: US equity and bond markets remained closed ensuring market moves were minor overnight. It is expected that US markets will re-open tonight. The city of New York is a significant producer of output and the cost of the storm could be higher than Katrina which devastated New Orleans.

Economic data released in Europe and the US was broadly in line with expectations. Oil prices were mixed overnight with WTI crude oil prices rising modestly on news US East Coast refineries sustained little damage during Hurricane Sandy and would resume operations shortly.

Spot gold prices were unchanged in light trading. Base metals prices were broadly stronger. Copper prices were steady over concerns that Chinese demand is variable. Agricultural commodities prices were generally stronger overnight supported by a modestly weaker USD.

In Germany, the unemployment rate remained unchanged at 6.9% in October which continues the trend of the jobless rate stabilising just below 7% this year.

In Asia on Wednesday, the Bank of Japan expanded its asset purchase program by a little more than the market expected (JPY11 trillion to JPY91 trillion). The Reserve Bank of India kept its repo rate unchanged at 8.0%, in line with market expectations, but cut the banks' cash reserve ratio to 4.25% with the Bank acknowledging the slowdown in growth whilst remaining focused on inflation.

Economic Calendar
31 OCT AU Sep Private Credit
UK Oct GFK consumer confidence
EC Oct CPI flash
EC Sep Unemployment Rate
US Q3 employment cost index
US Oct Chicago purchasing manager's index

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