Bell FX Currency Outlook The Australian Dollar has fallen more than a third of a US cent as investors took profits following recent rallies.

Australia: In currency markets, the AUD and NZD fell on negative comments concerning the US fiscal cliff but the EUR was firmly supported as euro zone finance ministers agreed to a single supervisory mechanism for banking supervision.

The AUD is trading above USD 1.0500 and it would appear profits were taken overnight following recent gains in the Dollar which rose by more than one US cent between Tuesday and yesterday.

In Australia, the major states' mid-year budget updates are all expected to be released before the end of the year, with the Victorian publication to be released today or tomorrow.

The current round of budget updates could look more like "mini-budgets" and will contain policy decisions that would have been unusual in previous years. The key event for Asian markets today will be the China HSBC flash PMI for December which is released at 12:45AEST.

Majors: It was a relatively quiet session for markets following yesterday's FOMC meeting. Equity markets closed slightly lower in uneventful trade
despite news that euro zone finance ministers had agreed to ECB supervision of the banking system. In the US, equities tracked sideways in early trade, but fell late in the session due to a perceived deterioration in negotiations on the 'fiscal cliff.'

US president Obama said the negotiations were "still a work in progress", while House speaker Boehner countered that the White House was not serious about cutting spending.

Moves in US bond markets were muted and US Treasuries sold off marginally, as did core European bonds. USD/JPY was firm as markets started to price in greater easing by the BoJ at next Thursday's meeting.
Economic Calendar
14 DEC CH HSBC Flash Manufacturing PMI (Dec)
EU Manufacturing PMI (Dec)
EU Services PMI (Dec)
US CPI (Nov)

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