Janet Yellen
International Monetary Fund Managing Director Christine Lagarde (L) and U.S. Federal Reserve Board Chair Janet Yellen have a question and answer period at the inaugural Michel Camdessus Central Banking lecture in Washington July 2, 2014. REUTERS/Gary Cameron (UNITED STATES - Tags: POLITICS BUSINESS)

Bell FX Currency Outlook: The Australian Dollar has retreated from the .9500 level of yesterday after a poorer than expected trade deficit figure pushed our local currency down.
Australia: After the .9500 level was touched yesterday, a poorer than expected trade deficit for May of AUD1.9bn versus the deficit figure of 200m figure expected knocked the wind out of the AUD. Further revisions to the trade figures of the previous three months of -950m also set the AUD up for a fall.

With lower commodity prices expected to continue in the near term and more deficit figures expected, the AUD had a weakish tone. Later in the year higher export volumes in iron ore will help offset some of these figures. Today we will hear RBA Governor Glenn Stevens speak and also see the release of retail sales figures, building approvals and the AiG performance of services index figures. Retail sales figures are expected to have fallen 0.1% in May as weaker consumer confidence locally has an effect.

The greatest issue for the AUD in the short run is tonight's release of US job figures. Overnight some initial payroll data was encouraging which may bring forward the first rate hike in the USA earlier than the mid-2015 time frame currently expected.

Majors: The USD was generally stronger overnight as the ADP employment report revealed a growth of 281k in jobs in June as compared to the May result of 179k and market expectations of 205k. This bodes well for the offical payroll data to be released tonight in the USA where the
market expects growth in jobs of 213k and a small decline in the unemployment rate to 6.2% from its current level of 6.3%.

the Fed's Janet Yellen spoke overnight and said there was no reason to change current monetary policy but was concerned by increased "risk
taking."

The GBP was strong overnight as recent manufacturing PMI data from the UK confirms the expansion of that economy. Tonight we will hear
the results of the latest ECB meeting where we expect no significant new announcements will be made after last month's events where a negative interest rate of 0.10% was implemented.
Economic Calendar
03 JUL AU Retail Sales MoM May
AU Building Approvals MoM/YoY May
US Change in Nonfarm Payrolls/Unemployment Rate Jun

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