FX DAILY REPORT

WEDNESDAY 17TH AUGUST 2011

Bell FX Currency Outlook

The AUD has held ground overnight despite the release of contrasting economic data from the US and Europe overnight.

Australian Dollar / US Dollar

1.20 1.10 1.00 0.90 0.80

Australia: The AUD opens this morning at USD 1.0470 which is 6 US Cents below the recent high of USD 1.1081 reached on July 27 which remains the highest level since the fixed exchange rate era ended with its float in December 1983. The feeling with the AUD is a positive one, following the tumultuous events of last week. The EUR remains vulnerable and interestingly, the CHF is giving back recent gains ahead of the Swiss National Bank and Swiss Government announcing new FX targeting measures this evening. Oil is choppy on global growth concerns and gold remains well bid as equities retreated and Treasuries rose. Fitch affirmed the US AAA rating with a stable outlook but that could be reviewed in November, if Congress fails to find the required $1.2bn in Budget reductions. The stable outlook indicates Fitch expects the rating to stay there, another positive for sentiment. In Australia, yesterdays Reserve Bank Board Meeting Minutes for August revealed the Bank is still maintain a tightening bias but they will need to see signs of an accelerating economy before they act. Today in Australia, we see the release of the Wage Cost Index (Q2) with the market looking for a rise of 1.0% (4.0% yoy) which is up from 3.8% yoy in Q1. Majors: As mentioned above, European growth concerns remain. There is a clear shift towards stronger fiscal unity in the Eurozone following the much anticipated summit between the German and French leaders in Paris. A Eurozone economic council is being created, with a proposal to elect a president of the council for 2 years. A deficit limit rule is being mooted to be in place in the 17 Eurozone countries constitutions by mid2012 with all countries working towards a balanced budget. U S equities finished lower on choppy trading. Offshore, the US has the PPI, Europe has its CPI and the UK has labour market data plus the BoE Minutes.

0.70 0.60
Oct-05 Oct-06 Oct-07 Oct-08 Oct-09 Oct-10 Oct-11

Todays Forecast Range

USD 1.0400-1.0550
Currencies AUD / USD USD / JPY EUR / USD GBP / USD NZD / USD AUD Crosses AUD / JPY AUD / EUR AUD / GBP AUD / NZD AUD / CAD Australian Rates Official Cash 3 Month Bill 10 Year Bond US Rates Fed Funds Last 1.0470 76.75 1.4403 1.6445 0.8340 Last 80.42 0.7272 0.6364 1.2556 1.0294 Last 4.75 4.84 4.45 Last 0.25 0.293 2.22 Last 1785.70 87.19 330.19 Last 4247 11406 5358 20212 9107 0.290 2.25 - / + (%) +1.1 -0.8 -0.1 - / + (%) -0.8 -0.7 +0.1 -0.2 +0.2 4.83 4.43 Previous High 1.0511 76.93 1.4472 1.6476 0.8408 High 80.76 0.7286 0.6414 1.2639 1.0308 Previous Low 1.0407 76.65 1.4355 1.6323 0.8274 Low 79.83 0.7239 0.6339 1.2504 1.0253

Economic Calendar 17 AUG

AUS Westpac Leading Index Jun EU Euro-zone CPI Jul UK BoE Minutes US PPI Jul

3 Month Libor 10 Year Bond Commodities Gold (US$ / oz) Oil (WTI) US$/bbl) CRB Index

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