Bell FX Currency Outlook: The Australian dollar traded in a tight range on Thursday night as the US and its allies waited for more reports from onsite UN inspectors in Syria over the use of chemical weapons against the civil population.

Australia: With no new action in the Middle East, the major equity indices have registered small gains overnight and the AUD has traded in the 0.8900's. Yesterday in Australia new home sales fell 4.7% in July which is the first decline in 5 months and sales of new detached homes fell by 6.4% from the previous month.

The capex spending figures for Q2 were better than the 1% growth expected by the market coming in at 4%. This almost makes up for the fall in capex of 4.1% in Q1. This will probably push the Q2 GDP figure higher when those figures are released in the near future.

The AUD is looking fragile and we would not be surprised to see the AUD trade lower tonight.

Later today the Chinese business sentiment index for August will be released and over the weekend we will see the official PMI data from China which is likely to have a direct bearing on the path of the AUD. With the US markets closed next Monday for

Labor Day volatility may be heightened by the potential thinness of the financial markets.
Majors: In the US GDP for Q2 was revised higher to 2.5% from the preliminary estimate of 1.7% and continuing weekly jobless claims fell by 6k in the latest figures.

The 4-week moving average of jobless claims is now at a low of 331k since the beginning of the GFC. The stronger than
expected GDP figure (most analysts had tipped a 2.2% rise) helped take the attention away from the situation in the Middle East.

The core PCE deflator rose by 0.8% q-o-q. The chance of the US Federal Reserve beginning their tapering in September increased overnight with these GDP figures.

German unemployment rose by a small amount which was unexpected. Some of the currencies from the emerging economies staged a modest recovery after the drubbing they have taken.

The Indonesian rupiah stabilised after touching its lowest level since April 2009 when the central bank raised interest rates by 50 bps as inflation it a four year high.

In India, the rupee staged a recovery of almost 3% as the central bank said they would make available USD to the nation's biggest oil importers to take pressure off the rupee.

Economic Calendar
30 AUG AU Private Sector Credit Jul
JN Industrial Production Jul
EZ Economic Confidence Aug
US Uni Michiagan Confidence Aug

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