Bell FX Currency Outlook: The Australian Dollar is trading half way between USD 1.0400 and 1.0500 following rallies on global stock markets at the end of last week.

Australia: Equity markets rallied in the US on the first day of trading after the Thanksgiving holiday, whilst in Europe, Frankfurt's DAX 30 lifted 0.89% and London's FTSE 100 rose 0.50%.

Risk assets were bid across the board with AUD and EUR the stand out's. Hovering in the background were EU, ECB and IMF discussions over the Cypriot bailout, as well as the prospect of a mandate for cessation emerging from the Catalonian election on Sunday. The main driver for the AUD early in this week will be ongoing negotiations between euro zone finance ministers concerning a possible write-down of Greece's debt.

If the eurozone nations agree to a bailout payment for Greece and a restructuring of its debt, the Australian dollar is expected to rally, but it will slide if the negotiations fail. The ministers are due to meet again on Monday for their third effort to agree on unlocking a EUR 31.2 bn slice of aid for Greece as it teeters on the verge of bankruptcy.

In Australia, a key release this week will be the list of major resources projects. Also, in the lead up to the RBA Board meeting on 4th December, important partial indicators will be released, feeding into the Q3 GDP report on 5th December.

Today we see a range between USD 104.20 and 104.70 until negotiations are concluded.

Majors: Financial markets finished the week on a more positive tone on Friday night. In currency markets, the US Dollar was under pressure as a generalised risk-seeking rally took hold on Friday night. The origins of the move could be traced to Thursday and the release of stronger-thanexpected HSBC China flash manufacturing PMI data for November (US markets were on holiday Thursday night for Thanksgiving).

A surprise improvement in the German Ifo business survey for November and hope that politicians in both Europe and the US will come to fiscal agreements supported markets.

EU finance ministers will meet again tonight to discuss options for the Greek aid package. Meanwhile, while there has been some more encouraging rhetoric from US politicians we remain sceptical that an agreement on the 'fiscal cliff' will be made by year end.
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