FX DAILY REPORT

MONDAY 29TH AUGUST 2011

Bell FX Currency Outlook

The much anticipated speech by US Federal Reserve Chairman Ben Bernanke to potentially stimulate US economic activity yielded no clear cut policy actions, however enough was said to strengthen US equity markets and push the AUD firmly into the mid 1.0500s.
Australia: Although some were disappointed that another round of
quantitative easing was not announced, Bernanke did say the next FOMC meeting in September would be extended for an extra day to consider further monetary policy measures. Noting the present circumstances did not warrant further action at the moment, US equity markets saw this as a sign of relief, and the Dow finished up 1.2% to 11,285, S&P 500 advanced by 1.5% to 1,177 and NASDAQ jumped 2.5%. This was after major European share indices were either flat or down, with the German market, especially banks and insurers, copping the brunt of the falls because of the ban on short selling on some European bourses. Gold rebounded by 3% to US$1828 an ounce after the steep falls of previous days, as the commodity currencies rebounded, and that the possibility of QEIII was still on the US Feds agenda. Oil held steady in light of a generally weaker USD, finishing at US$85 a barrel for WTI crude. RBA Governor Stevenss comments on Friday afternoon, where he reminded the market that inflation in Australia is being closely watched, led most analysts to believe the RBA is more likely to raise interest rates in the next 12 months (rather than lower them). This provided local support for the AUD. We see a relatively quiet day ahead, with a firm tone for now.

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 1.0475 1.0625

Currencies AUD / USD USD / JPY EUR / USD GBP / USD NZD / USD AUD Crosses AUD / JPY AUD / EUR Last 1.0575 76.75 1.4485 1.6345 0.8400 Last 81.15 0.7295 0.6460 1.2580 1.0380 Last 4.79 4.84 4.40 Last 0.25 0.323 2.19 Last 1797.30 85.37 335.25 Last 4200 11285 5130 19583 8798 0.319 2.25 - / + (%) 1.9 0.1 1.0 - / + (%) -0.3 1.2 0.0 -0.9 0.3 4.85 4.36 Previous High 1.0593 77.70 1.4601 1.6382 0.8420 High 81.34 0.7304 0.6493 1.2624 1.0394 Previous Low 1.0419 76.61 1.4328 1.6263 0.8265 Low 80.72 0.7248 0.6399 1.2565 1.0302

Majors: US Q2 GDP was revised downward from its previously revised

1.3% figure to 1%. With the effects of Hurricane Irene (which struck the east coast of the US on the weekend) likely to impact short term economic activity, this was again a sobering note that the US economy is growing, but at a very slow pace. It is too early to assess the damage Irene has done but the level of rebuilding required might provide a benefit to growth as we have seen in other natural disasters. All financial markets based in New York City should be open for business on Monday. Later today the markets eyes will be on ECB President Trichet, who be speaking and who may announce further sovereign debt purchases by ECB.

AUD / GBP AUD / NZD AUD / CAD Australian Rates Official Cash 3 Month Bill 10 Year Bond US Rates Fed Funds

Economic Calendar 29 AUG

3 Month Libor AU HIA New Home Sales JUL US Personal Income / Spending JUL US Dallas Fed Manufacturing Activity AUG UK August Bank Holiday 10 Year Bond Commodities Gold (US$ / oz) Oil (WTI) US$/bbl) CRB Index

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