Bell FX Currency Outlook: The Australian dollar has resumed its softer tone this morning after a quick move
up yesterday afternoon.
Australia: The Australian dollar was close to four month lows yesterday trading just under 1.0200 after the release of poorer than expected local capex figures for Q4 (-1.2%) versus an expected gain of 1%.

However, it staged a quick rally to the high 1.0200's after the projected capex data for 2013-2014 was interpreted by some as better than expected in light of the anticipated slowdown in mining investment.

A report from Bloomberg that was released under a Freedom of Information request said the RBA thought there were as many as 34 central banks as of September 2012, holding Australian dollars as part of their currency reserves.

The RBA's analysis of the AUD at that time said it was overvalued between 4% and 15%. Although the Q4 capex figures were less than expected, the higher projected figures for capex in 2013-2014 and this report forced a generally short AUD market higher as positions were stopped out as the currency rose toward 1.0280.

Overnight we have seen the AUD move lower again as the USD gained strength in light of improving figures from the US.
Major share indices in the US were only slightly softer as the Dow still hovers below its record close achieved in 2007.

Locally today we will see the release of Chinese PMI data for February as well as the broader HSBC manufacturing PMI index around midday today.

The AiG manufacturing and the some house price figures as well as the RBA's commodity index from last month could have some effect on the trading of the AUD. If the Chinese data is lower than expected we could expect to see the AUD trade lower.

Majors: In the US, Q4 GDP data was revised upward to 0.1% from its earlier estimate of -0.1%. On an encouraging note personal consumption increased 2.1% and also a decline in inventories in Q4 which wiped 1.6% from the GDP figure looks like it will reverse in Q1 of 2013 and provide some growth to the current quarter.

Weekly jobless claims fell 22k to 344k last night and the Chicago PMI index came in at 56.8 which was higher than the previous figure and better than expected.

In Europe it appears that in Italy a coalition may be formed between the forces of Bersani and Berlusconi and that some of the austerity measures introduced by the Monti government may continue which helped move most major European share indices higher and Italian bond yields slightly lower.

In Japan, ADB President Kuroda who has a very dovish view on monetary stimulus was nominated by the government as the next head of the Bank of Japan with a vote by parliament scheduled in two weeks.

This helped the Nikkei index move higher by 2.7% as it appears the easy monetary conditions will continue in Japan.
Economic Calendar
01 MAR AU RP Data- Riskmark House PX Actual
CH HSBC Final Manufacturing
EU FebPMI Manufacturing
EU Jan Euro-zone Unemployment rate

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