Bell FX Currency Outlook: The Australian Dollar is trading back below USD 1.0300 this morning on renewed market concerns over global economic growth.

Australia: Risk appetite weakened last night after DuPont, 3M and Alfa Laval reported weaker results which weighed quite heavily on equity markets which had higher expectations. Whilst stock markets finished lower in both Europe and the US, there was a rally in US Treasuries and the US Dollar was stronger across the board.

Oil prices were weaker on the weaker-than-expected corporate earnings although an improving US crude oil supply picture weighed on prices as well.

Spot gold prices fell below the 50-day moving average thanks to the above. Base metals prices were softer overnight as a stronger USD and concerns over Spain's sovereign debt reduced risk appetite. So just when the AUD seemed wanting to keep on with its recent ascent, it has encountered strong headwinds again.

The market's focus will be on Australian Q3 CPI data released at 11.30 AEST. This is a key reading in the scheme of
things with an underlying inflation outcome of 0.5% likely to reinforce the likelihood for another 0.25% cut in interest rates as soon as next month.

Majors: The US Dollar was stronger in amongst the major hits in stock markets however the size of the moves in the major currency pairs was not huge.

The Canadian dollar was slightly stronger as well following the Bank of Canada's monthly meeting which left rates at 1%. The Governor said it may tighten rates because of record household debt which stands at 165.8% of disposable income.

House prices have risen a whopping 56% since June 2005. Note Australia's household debt, in comparison, is 150% which is down from a peak of 156% in September 2006.

Today we have China's Manufacturing PMI, as well as the PMI's for Europe and the German IFO survey.

In the US, there are New Home Sales and the Federal Reserve's FOMC meeting in which it is unlikely there will be any change in direction by the Federal Reserve, having invoked QE 3 of an additional US$40bn per month at the last meeting.

Economic Calendar
24 OCT AU Q3 CPI
AU CPI Trimmed mean/ Weighted Medium
EC PMI Manufacturing Services Composite
GE IFO- Oct Business Climate/Current expectations
US Sep New Home Sales
US FOMC policy decision

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