Bell FX Currency Outlook: The Australian Dollar held its ground overnight, following positive news regarding Greece and Spain, and is poised ahead of the RBA's interest rate decision today.

Australia: The AUD has opened this morning little changed from yesterday's close. Markets clung to positive news that Greece is planning to buyback EUR 10bn (of its outstanding debt) and Spain has requested a EUR 39.5bn bailout for its ailing banking sector.

The news saw the AUD higher against the Greenback briefly, although it failed to break out of its recent trading range. The AUD drifted lower in yesterday's session, as Australian Retail Sales for October were lower than market expectations.

It found support later in the session when the China HSBC manufacturing PMI for November printed above 50 points, suggesting the economy is recovering after several quarters of slowing growth.

Our Dollar is expected to remain fairly subdued ahead of today's key RBA decision at 2:30pm. Recent weakening data in the form of yesterday's flat retail sales figures, last week's CAPEX data and a fall in job ads for the eight consecutive month, have resulted in markets pricing a 90% chance of a 25bp cut this afternoon.

We feel the AUD will be determined to test support levels near 1.0300 if this indeed is the result this afternoon.

Majors: European equities rose overnight with the news Greece had offered to purchase EUR 10bn worth of debt added to market sentiment.
The EUR broke back above 1.0300 against the Greenback and the GBP also hit fresh highs. News that Spanish banks formally requested a bailout
also underpinned the positive sentiment.

The FTSE rose 0.1% to 5,871 while the German DAX ended the session 0.4% higher at 7,435. A disappointing US manufacturing result saw US equities lower and weighed on sentiment late in the session with the DJIA ending 0.4% lower at 12,969 and the S&P 500 finishing 0.3% lower at 1,411.

The "fiscal cliff" remains a key concern and a dampener to activity. The weaker read also saw oil prices lower in choppy trade despite the positive read out of China.

Brent fell 0.8% to USD 110.8 per barrel, while WIT futures were 0.2% lower at USD 89.0 per barrel. Metals and commodities ended the session mixed. Economic Calendar
04 DEC AU RBA Interest Rate Announcement
AU Building Approvals Oct
EU Euro-Zone PPI Oct
CA Bank of Canada Interest Rate Announcement
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