Bell FX Currency Outlook: Australian dollar strengthens in morning trade as the US Fiscal Cliff continues to dominate markets.

Australia: Suggestions the US Fiscal Cliff could be dealt with before Christmas has seen the Australian Dollar higher in morning trade despite a general weakness in commodities. The currency hit a high of 1.0476 against a weaker Greenback; up from yesterday's 1.0448.

Positive comments from US President Obama and US House Speaker, Republican John Boehner overnight suggesting an agreement can be made saw risk sentiment improve throughout the session.

Yesterday domestically saw an improvement in Australian Q3 construction work up 1.7% broadly in line with expectations. Today will see Q3 new capital expenditure (CAPEX) data due at 11:30am. This data is used to determine business investment in GDP.

Signs of continued weakness in non-mining investment will add to the case for further rate cuts by the RBA ahead of next week's meeting

Majors: US and European Equity markets recovered from earlier losses on perceived positive news on US Fiscal Cliff talks overnight. US equity markets have been under pressure of late due to concerns over the impact of planned tax increases and spending cuts due to take effect in January.

Comments from US house Speaker John Boehner and from Washington that they are open for discussions on both tax increases and spending cuts saw a sharp turnaround in sentiment.

The DJIA ended the session 0.6% higher at 12,954 whilst the S&P 500 was 0.4% higher at 1,405. European equities saw a modest bounce with the FTSE ending 0.1% higher at 5,803 and the German DAX was 0.2% higher at 7,343.

Oil prices fell overnight with Brent ending the session 0.6% lower at USD 109.5 per barrel while WTI Futures fell 0.9% to USD 86.5 per barrel.

Commodity and metals were mixed overnight but were generally lower. Spot gold was sharply lower due to a large sell order but recovered some ground to finish 1.3% lower at USD 1,719 per ounce.

Economic Calendar
29 NOV AU Q3 PRIVATE NEW CAPITAL EXPENDITURE
EC NOV BUSINESS CLIMATE INDICATOR
GE NOV UNEMPLYMENT CHANGE
US Q3 GDP
US OCT PENDING HOME SALES (For latest dealing and prices visit www.bellpotter.com.au)