Bell FX Currency Outlook: The Australian Dollar lost ground overnight on the back of a much stronger ISM result out of the US.

Australia: The AUD hit a low of USD0.9089 Monday night after the Institute for Supply Management's (ISM) US factory activity reading for November showed the strongest result since April 2011.

The stronger data conviced the market that the US Federal Reserve's Federal Open Market Committee could begin tapering its stimulas measures as early as this month. This saw the USD stronger across the board for the remainder of the offshore session.

On the day we have a packed data calander along with Reserve Bank Board Meeting. While no change is expected, the
market will be very much focused on what the RBA has to say about the AUD.

In terms of data we have Australian retail sales for October, with 0.4%mom expected. The Balance of Payments are expected to show that net exports contributed to GDP growth in Q3, +0.4pps.

While the Current Account deficit is expected to widen to -$11.5bn from -$9.2bn for Q3. With renewed speculation that the Federal Reserve may begin its tapering as early as this month the USD was stronger overnight.

As mentioned above, stronger than expected factory data in the US surprised the market with the US ISM very strong at a solid 57.3, it was expected to pull-back.

The finer details were also good with employment and orders higher but investories and prices lower. The UK also added to postivie tone overnight with their PMI moving into very high levels at 57.3, while Euro-zone PMI only increased to 51.6 from 51.5. US retails sales were a little disappointing, falling 2.9% despite the tradition Black Friday weekend sales after Thanksgiving.

There is very little in terms of data offshore tonight an this is likely to keep thing rane bound.
Majors:
Economic Calendar
03 DEC AU Retail Sales
AU Net Exports of GDP
AU RBA Cash Rate Target

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