Australian Dollar Outlook – December 22, 2014

An employee counts U.S. dollar bills before changing it to Philippine Pesos inside a money changer in Manila September 19, 2013. The Philippine central bank said on Thursday it would keep intervening in the market to manage wild swings as the peso jumped nearly 1 percent following the U.S. Federal Reserve's decision to maintain its bond-buying stimulus programme. REUTERS/Romeo Ranoco (PHILIPPINES - Tags: POLITICS BUSINESS)

Bell FX Currency Outlook: The Australian Dollar had a quiet day of trading on Friday and has opened in the mid .8100's this morning.

Australia: We expect the AUD to trade in a relatively tight range as new data releases are few and far between this time of the year. As we approach year end volumes are likely to be lighter in the foreign exchange market but there could be still some quick sudden moves since volumes this time of the year tend to be thinner. There are no significant data releases this week. The oil price bounced a bit higher on Friday after the huge moves of the recent past and gold traded in a tight range of USD1195 to USD1200 an ounce. Major equity markets maintained their recent strength and recorded generally small gains on Friday. The Abbott government announced a reshuffle of cabinet positions on the weekend.

Majors: The USD has maintained its firm tone on Friday. The most recent manufacturing index figures from the Kansas City district of the Federal Reserve system in the US saw the index rise to 8 which is above its recent results and higher than estimates of 7. We expect the US to remain firm against the JPY, EUR and GBP as we go into the closing days of 2014. In the UK, inflation is low and comments indicate that the Bank of England is not in a hurry to raise interest rates. The NZD maintains its relative strength and we have seen the AUDNZD trade below 1.0400 earlier today.

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