A man walks past various currency signs, including the dollar (top R), Australian dollar (top L), pound sterling (centre L) and euro (bottom L), outside a brokerage in Tokyo October 28 2014.
A man walks past various currency signs, including the dollar (top R), Australian dollar (top L), pound sterling (centre L) and euro (bottom L), outside a brokerage in Tokyo October 28 2014. A year-long investigation into allegations of collusion and manipulation by global currency traders is set to come to a head on Wednesday, with Britain's financial regulator and six big banks expected to agree a settlement involving around ?1.5 billion ($2.38 billion) in fines. The settlement comes amid a revival of long-dormant volatility on the foreign exchanges, where a steady rise of U.S. dollar this year has depressed oil prices and the currencies of many commodity exporters such as Russia's rouble, Brazil's real and Nigeria's naira - setting the scene for more turbulence on world financial markets in 2015. Picture taken October 28, 2014. Reuters/Yuya Shino

Bell FX Currency Outlook: A lack of data and fresh indicatorsleft the market with little directional bias overnight.

Australia: Oil, other commodities, and equities, all had a good night lastnight, helping to steady the AUD, which recovered from Monday’s Chinainducedlosses. The USD was under pressure after Fed Vice ChairStanley Fischer delivered a cautious message regarding inflation, althoughAtlanta Fed President Lockhart reiterated his ‘September’ message.Tonight the US has small business optimism, which should support USD.The USD lost some traction through the course of the night, irrespective ofthe Fischer/Lockhart views, with oil currencies making up some ground asoil bounced at the start of the week, Brent crude up $1.63/bbl to $50.24,benefiting the likes of the CAD (+1.18%), the NOK (+0.77%) and the RUB(+2.27%). Euro (+0.80%) and sterling (+0.75%) also recovered someground, with the AUD regaining a 74 handle after testing through the nightdown toward 0.7350.

Majors: With just over a month to go until the Sep 18 FOMC meetingannouncement, Fed speakers remain right under the spotlight. Last nightwe heard from two, Denis Lockhart, Atlanta Fed President and voter andStanley Fischer, no 2 at the Fed each with their own perspective. Nosurprise that Lockhart followed up last week’s pro-September lift-offcomments with more of the same. While he said there is no “foreordaineddate for lift-off” and that it would be dictated by incoming data, he said thepoint of rate lift-off is “close” and that he’s “very disposed” to September. Meanwhile, interviewed on Bloomberg TV, Stanley Fischer, Vice-Chair ofthe Fed was more circumspect. He recognised that the economy hasnearly reached full employment (the labour market is nearing its sweetspot), but that temporary factors are holding down inflation – low energyand commodity prices together with the strong dollar – and still a concern.The problem is not with the employment part in the (Fed’s) mandate, that’sdoing fine, it’s with the inflation part, Fischer said.

Economic Calendar 11 AUG

  • AU NAB Business Confidence Jul
  • GE ZEW Survey Current Situation, Expectations Aug
  • US NFIB Small Business Optimism Jul
  • US Wholesale Inventories Jun

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