FX DAILY REPORT

FRIDAY 19TH AUGUST 2011

Bell FX Currency Outlook

Overnight saw equity markets fall and the AUD followed, trading down to USD1.0350 as once again investors concerns over the European debt issues took centre stage. Australia: While these concerns are nothing new to the market, it does
show the fragile and volatile nature of current market conditions. Increasing concerns that the European debt crisis may flow into the US Banking system have been getting air play and in turn has seen banking stocks across the globe come under selling pressure, which has weighed on equity markets. Base metals fell with copper down 2.2%, lead down 2.7%, nickel and aluminium fell 3.0% and 2.5% respectively. The AUD and NZD fell sharply against the USD as the global growth outlook seems to have weakened. The JPY will be the currency to watch today as recent comments from Japan officials about the need to intervene in currency markets to slow the strength of the JPY. Overnight moves and potential moves today may see the BOJ enter the market today. While there is no local data due for release today, we expect the AUD to remain under pressure following its overnight direction.

Australian Dollar / US Dollar

1.20 1.10 1.00 0.90 0.80 0.70 0.60
Oct-05 Oct-06 Oct-07 Oct-08 Oct-09 Oct-10 Oct-11

Todays Forecast Range

USD 1.0275-1.0400
Currencies AUD / USD USD / JPY EUR / USD GBP / USD Last 1.0363 76.58 1.4320 1.6498 0.8212 Last 79.37 0.7232 0.6276 1.2618 1.0277 Last 4.75 4.82 4.45 Last 0.25 0.298 2.062 Last 1824.60 82.38 326.42 Last 4251 10991 5092 20016 8944 0.296 2.165 - / + (%) +01.9 -5.9 -2.3 - / + (%) -1.2 -3.7 -4.5 -1.3 -1.3 4.88 4.45 Previous High 1.0558 76.71 1.4451 1.6555 0.8378 High 80.88 0.7313 0.6379 1.2672 1.0353 Previous Low 1.0353 76.45 1.4271 1.6420 0.8196 Low 79.19 0.7237 0.6281 1.2533 1.0264

Majors: Equity markets across the globe took a battering overnight with
German DAX down 5.8% the FTSE 100 fell 4.5% while in the US the DOW ended down 3.7% and the S&P fell 4.5%. Poor US data seemed to be the main driver for the weaker US equities overnight with the US Philadelphia Fed Manufacturing Survey for August falling to -30.7 from 3.2; much weaker than what markets were expecting. Crude oil fell 6% to US$82.00 a barrel, while (no surprise) gold surged to US$1,826.00 an ounce on safe haven buying. The US CPI data for July was released overnight reported a rise of 0.5% above the markets expectations of 0.2% to be up by 3.6% year on year. The core CPI reading (ex food & energy) came in as expected +0.2%. The US initial jobless claims data for the th week ending 12 August were 408k slightly worse than the expected 400k forecast. Weaker housing data also weighed of confidence overnight with the existing home sales data for July reporting a fall of 3.5% after the 0.65 gain in June.

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 Fed Funds 3 Month Libor 10 Year Bond

Economic Calendar 19 AUG

CH MNI August Business Sentiment Survey UK Public Sector Net Borrowing JUL CA CPI JUL

Commodities Gold (US$ / oz) Oil (WTI) US$/bbl) CRB Index

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