Bell FX Currency Outlook: The Australian Dollar has opened around 1.0700 and is little changed from Friday's close as the leadership vote in the Australian Labour Party caucus commences at 10 am today.

Australia: The result will not impact the financial markets which over the weekend traded quietly after the G20 meeting in Mexico City. Equity markets were modestly higher in Europe and the trend continued to the US where the Dow and S&P 500 finished marginally higher, with the S&P 500 finishing at its highest level since June, 2008.

The ratings agency Fitch downgraded the CBA, NAB and Westpac on Friday afternoon to a rating of AA- with a stable outlook which is the same rating as the ANZ.

Oil continued to rise as tensions surrounding Iran and its uranium enrichment program and the consequent restrictions on imported oil by major Western countries pushed the price of Brent crude past US$125 a barrel and WTI crude finished just below US$110 a barrel.

There is concern being expressed that if oil remains at these levels this is dampen consumer sentiment and hinder economic growth.

In Australia on Wednesday we see the first releases of Q4 GDP data with capex, construction work and company profits.

Majors: Most of the attention on the weekend was on the G20 meeting where IMF President Lagarde was calling for $600bn more to be contributed by member central banks in order to aid the resources of the ECB and EFSF if additional financial support was needed to assist Europe.

The US, Japan, Brazil. Russia, UK and Canada balked at contributing more funds at this time. Later this week the ECB will make available another tranche of funds to European banks for 3 years at 1% to strengthen their balance sheets and encourage further lending.

The economies of Germany and the UK performed in line with GDP predictions for Q4 by both contracting 0.2% q-o-q. Economic sentiment in the US continues to improve with the final February reading of consumer confidence by the University of Michigan revised upward by 2.8 to a reading of 75.3.

AUD has moved downward on the cross rates for EUR and GBP although the AUDJPY has benefitted from the recent actions of the BOJ to lower the value of the JPY and continues to move higher.

Economic Calendar
27 FEB AU Federal Labor Leadership Ballot (10am AEST)
US Dallas Federal Manufacturing Activity FEB
EC Euro Zone M3 JAN
AU CBA HIA House Affordability Q4