Australian Dollar Outlook – December 1, 2014

IN PHOTO: A stack of Australian one dollar coins stand on a U.S. one dollar note in this photo illustration taken in Sydney July 27, 2011. Australian consumer prices rose by more than expected last quarter while underlying inflation proved alarmingly high, reviving pressure for an increase in interest rates and lifting the local dollar to a 29-year peak. REUTERS/Tim Wimborne

Bell FX Currency Outlook: The Australian Dollar has opened this week's trading below the 85 cent level as commodity currencies remain under pressure.

Australia: The AUD and the wider financial markets will be influenced by a large volume of data due to be released both locally and internationally this week. As the oil price continued to slide on Friday, the iron ore price rose for the second day in a row on Friday but the AUD continued to weaken as the USD continued its firm tone. Today we will see the latest local inflation, Q3 company profits and inventory figure information that will provide a clue to the strength of our Q3 GDP figure that is to be released on Wednesday. Most economists predict growth of 0.8% for the quarter.

Around midday today we will see the latest Chinese PMI manufacturing data from the Chinese government and HSBC. This can always influence the short term trading pattern of the AUD. Tomorrow we will hear from the

RBA after their monthly meeting where we expect no change to interest rates and continuing comments that the AUD is still overvalued relative to the change in the terms of our trade.

Majors: On Friday, we saw Eurozone CPI and Core CPI figures for November come in as expected at 0.3% yoy and 0.7% yoy, respectively. Retail sales in Germany grew 1.7% yoy as expected in October. The unemployment rate in the Eurozone stayed at 11.5% for October. On Thursday, the ECB meets and there continues to be much speculation they are moving closer to being more aggressive on sovereign debt bond buying although various individual members are divided on this issue. In Switzerland, a referendum on the weekend was defeated that would have seen the Swiss National Bank be mandated to hold at least 20% of their USD540bn balance sheet in the form of gold. Gold slid another 1.8% to USD1,167 an ounce on Friday while WTI crude fell 4% to USD66.20 a barrel after OPEC announced on Thursday they would not reduce their production quota below the current level of 30m barrels per day. At the end of the week we will see the latest non-farm payroll data from the US that can have a significant impact on the currency market.

ECONOMIC CALENDAR

01 DEC CH Manufacturing PMI

CH HSBC China Manufacturing PMI

UK Markit US Manufacturing PMI

US ISM Manufacturing

[Kick off your trading day with our newsletter]