FX DAILY REPORT

TUESDAY 23RD AUGUST 2011

Bell FX Currency Outlook

The AUD is relatively unchanged this morning as a lack of offshore data paved the way for a quiet trading session Australia: Our local currency is trading just below USD1.0400, despite a positive night in the offshore equity markets and continual gains in the gold price. The US markets started the week in the black, with the DOW up 0.3% after 4 consecutive weeks of losses as investors continue to fear that we will experience a double dip recession. Reports flowing out of Libya that the rebels were extremely close to capturing Gaddafi as they move towards the presidential compound in South Tripoli, and that two of his sons have been captured, provided the positive tone for the markets. During our local session today, the focus will be on a speech by the RBAs Deputy Governor Battellino as well as the Chinese PMI result. Investors will be paying close attention to the speech this afternoon, which will focus on the economic and financial conditions, in the hope for further clarification as to the next move by the RBA. While the markets are pricing the easing of the current monetary policy, it is expected that Battellino will attempt to hose down the recession like policy easing expectations in the market. As mentioned above, the Chinese data due out today will also be of interest, as Chinas economic conditions are viewed as a dominant driver of our economy and interest rate policy settings. Its expected that the PMI result will be marginally stronger. Majors: This week is very light on for top tier data, not only locally, but also overseas, which has investors looking forward to Fridays meeting of the global central bankers at Jacksons Hole. Many will remember this time last year when Ben Bernanke pledged to do all that he could in relation to the conditions in the US, and began the process of QE2. An extraordinary measure like QE3 is unlikely to come out of the meeting, which caused some higher yielding currencies like the EUR weaken against the USD. The currency market has also been on high alert, watching for further intervention by Japanese officials after the JPY surged to a record high of JPY75.94 against the USD on Friday. Its unlikely that there will be any intervention prior to Fridays meeting, as the JPY has weakened from its record highs overnight.
Economic Calendar 23 AUG

Australian Dollar / US Dollar

1.20 1.10 1.00 0.90 0.80 0.70 0.60

Oct-05

Oct-06

Oct-07

Oct-08

Oct-09

Oct-10

Oct-11

Todays Forecast Range

USD 1.0320-1.0440
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 Last 1.0395 76.82 1.4359 1.6460 0.8232 Last 79.85 0.7235 0.6310 1.2619 1.0296 Last 4.79 4.81 4.23 Last 0.25 0.308 2.106 Last 1899.60 84.42 331.77 Last 4082 10855 5095 19487 8628
02 9255 7473 02 8243 3502 02 8243 3503 02 9255 7294 02 8243 3504
TOLL FREE 1800 003 815 INFO@BELLPOTTER.COM.AU WWW.BELLPOTTER.COM.AU

High 1.0473 77.21 1.4434 1.6520 0.8279 High 80.48 0.7263 0.6343 1.2738 1.0330 Previous 4.81 4.23 Previous 0.303 2.060 - / + (%) +2.6 +2.4 +0.7 - / + (%) -0.5 +0.3 +1.1 +0.4 -1.0

Low 1.0363 76.50 1.4347 1.6436 0.8162 Low 79.53 0.7220 0.6291 1.2614 1.0274

CH HSBC Flash Manufacturing PMI AUGCA CPI JUL AU RBA Deputy Governor Battellino Speech US Richmond Fed Manufacturing Index US New Home sales

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

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