DAILY CURRENCY OUTLOOK

* AUD opens the week virtually unchanged from Friday’s close
* Little local data this week. Focus on US GDP and Durable Goods
* Argentina win Soccer World Cup 4-2 on penalties

The AUD opens this morning against most major currencies virtually unchanged from Sydney’s Friday close. Against the greenback, the Aussie closed at 0.6702 and, over the weekend, trading in a narrow range of 0.6679 – 0.6718. This lack of movement is a far cry from the middle of last week when we saw the Aussie quickly rally from 0.6780 to 0.6892 (a level not seen since the 13th of September) and then fall early Friday morning to 0.6679, where it has remained pretty much since. Once again, it was the USD story more than anything local – better than expected Australian job numbers last Thursday and strong commodity prices, particularly Iron Ore and Gold, doing little to stop the Aussie slide. As expected, the US Federal Reserve increased interest rates by 0.50% but once the Bank of England, European Central Bank and Swiss National Bank did, the same market sentiment turned on the likelihood of a global economic slowdown. This put downward pressure on the higher risker currencies like the AUD. As we head into the final weeks of the year, the Aussie is likely to be further exposed due to squaring of positions and thin Christmas trading, which increases volatility.