Australian Dollar Outlook - Dec. 8, 2015

Bell FX Currency Outlook: Oil prices remained under pressure following OPEC’s inability to agree on a cap for production.

Australia: The AUD has given back some ground, trading back down into the mid 72s, down 1.0% from yesterday, unable to hold off the unrelenting commodity headwinds. Commodities were front and centre of market attention overnight, with oil prices taking another sizeable hit, both WTI and Brent crude down between 5-6% in the wake of OPEC officially abandoning its 30mb target late last week. The price of oil has made new lows for the year, and is at the lowest level since early 2009. Ahead of the RBNZ meeting on Thursday with the market split view on whether the Bank will cut or not, the NZD declined to just above 1.0920. The market though will be focussed on the November NAB Business Survey at 11:30AEDT, followed by the November Chinese trade numbers about 2:00AEDT.

Majors: There was no major U.S data, with limited Fed speak. Lockhart and Bullard talked up very solid labour gains for lift-off this month. Bullard said the Fed should avoid the mechanical normalisation policy we have seen before. He does not want to repeat the last tightening cycle, when the Fed was persistently increasing rates at every meeting. Bullard also added that the Fed made a mistake in not hiking in September.

Economic Calendar 08 DEC

• JN GDP Q3
• AU NAB Business Confidence/Conditions
• CH Trade Balance/Exports/Imports Nov
• EC GDP Q3

BellFx

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