FX DAILY REPORT

WEDNESDAY JUNE 22 2011

Bell FX Currency Outlook

The Australian Dollar has opened around the USD1.0600 level this morning as stock markets and base metals rallied overnight on the back of a positive result in the Greek parliament.
Australia: As the market expected, the Greek Prime Minister survived a confidence vote, which will allow him to push through the austerity package he has agreed with Euro-zone officials to ensure that Greece gets the next tranche of loan money. Yesterday, during our local session, the RBA minutes from the June board meeting were released, with the RBA implying that while rates would need to be raised at some point there was no urgency. The minutes also noted that while the mining industry was performing well other areas in the economy were seeing weaker conditions with asset prices falling and increased downside risks to global growth as sovereign debt issues in Europe continue to weigh on markets. These comments saw the AUD fall sharply from USD1.0610 to USD1.0530 as traders cut long positions. Base metals improved overnight on investor confidence with copper up 0.8% and nickel up 1.1%. Gold rose 0.3% to be trading at US$1,546.00 per ounce with oil also firmer at US$94.17 a barrel. Today we have the release of the Westpac leading index for April, which is unlikely to move the market, with the AUD expected to take most of its direction from developments in Asia. Majors: US markets followed on from Europes lead overnight with the Dow closing up 0.9%, the S&P up 1.3% and the Nasdaq up 2.2%. On the data front, US existing home sales reported a fall of 3.8% for the month of May following the 1.8% increase in April. In Germany overnight the German ZEW Economic Sentiment Index for June came in 9, below forecasts of 5, as recent European debt concerns have weighed on confidence and spending. Tonight in the US the market will be closely watching for the release of the FOMC rate decision and accompanying statement to provide a timeline around the Feds exist strategy from its QE2. The market has been pricing in that the US will start to raise rates in 2012.

Australian Dollar / US Dollar

1.10 1.00 0.90 0.80 0.70 0.60 Aug-06

Aug-07

Aug-08

Aug-09

Aug-10

Aug-11

Todays Forecast Range

USD 1.0540-1.0650
Currencies AUD / USD USD / JPY EUR / USD GBP / USD NZD / USD AUD Crosses AUD / JPY AUD / EUR AUD / GBP AUD / NZD AUD / CAD Australian Rates Official Cash 3 Month Bill 10 Year Bond US Rates Last 1.0585 80.23 1.4407 1.6245 0.8120 Last 85.04 0.7363 0.6522 1.3039 1.0299 Last 4.75 4.99 5.13 Last 0.25 0.246 2.984 Last 1547.10 93.40 338.14 Last 4508 12190 5775 21851 9460 0.247 2.958 - / + (%) +0.4 +0.2 +0.6 - / + (%) +1.2 +0.9 +1.4 +1.2 +1.1 4.99 5.20 Previous High 1.0622 80.34 1.4423 1.6254 0.8147 High 85.16 0.7395 0.6542 1.3102 1.0387 Previous Low 1.0533 80.05 1.4305 1.6167 0.8077 Low 84.52 0.7352 0.6500 1.2988 1.0295

Economic Calendar 22 JUNE

AUS Current Account Balance Q1 AUS Westpac Leading Index Apr US FOMC Rate Decision

Fed Funds 3 Month Libor 10 Year Bond Commodities Gold (US$ / oz) Oil (WTI) US$/bbl) CRB Index Equities ASX 200 Dow Jones FTSE Hang Seng Nikkei

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