Bell FX Currency Outlook: The Australian dollar traded in a relatively wide range overnight, with the movements driven mainly by developments out of Europe and the US.

Australia: The AUD was initially bought up towards USD1.0850 following the release of details of the second round of the ECB's highly anticipated long term refinancing operation.

The large boost in liquidity for Euro-zone banks was viewed as a positive for the struggling region, initially boosting the EUR, which in turn dragged the AUD higher.

The local unit's fortunes quickly turned around once US Federal Reserve Chairman Ben Bernanke began his testimony before the US Congress. With no explicit mention of another round of quantitative easing in his testimony, the market took the view that the Fed Chairman may be reconsidering his stance on monetary policy.

This sparked a round of USD buying, and as a result the AUD was sold back down again to be trading close to USD1.0700 this morning.

Local data releases today include building approvals for January and private capital expenditure for 4Q. Also of interest for local markets today will be the release of China's PMI data for February.

Majors: The ECB provided a record EUR530bio in loans to 800 Eurozone banks in its second LTRO. This follows on from the EUR489bio that was disbursed back in December.

Market reaction was generally quite positive as the loans are seen as essential for future growth in the region.

Market attention quickly turned back to the US once Ben Bernanke began his speech. While the Fed Chairman acknowledged that "the job market remains far from normal" he also made reference to better economic numbers, something he has not done in the recent past.

Data releases of late seem to back the view that the US economy is slowly improving. Final quarter 2011 GDP figures released overnight showed the US economy grew by a better-than-expected 3.0% during the period. This has forced many to revise their expectations for QE3.

Economic Calendar
1 MAR AU Private Capital Expenditure 4Q
AU Building Approvals JAN
CH PMI Manufacturing FEB
UK GfK Consumer Confidence JAN