Bell FX Currency Outlook: The AUD is unchanged this morning, currently trading at USD1.0605, due to another quiet offshore trading session

Australia: The only noteworthy influence was a speech given overnight by the New York Fed President and Vice Chairman of the FOMC William Dudley, who reiterated the Fed's cautious tone. And while the AUD weakened overnight, back towards its first support level of USD 1.0560, it bounced fairly convincingly back off this level, following the lead from equities after the speech was handed down.

As expected the Australian Senate passed the Mineral Resources Rent Tax overnight. This will affect many coal and iron ore taxpayers, from its implementation on July 1st 2012.

Today the RBA will release the minutes from its March interest rate meeting at 11:30 AEDT. Attention will closely be paid to whether the commentary will hint at further easing down the track. Given that the RBA seem to be holding firm on their stance that the current policy is adequate for now, but that there is room for movement if required, we expect little new news to come out this morning, and as a result, little movement in the AUD.

Majors: The USD continues to weaken against the EUR as investors pare back on their USD holdings. The strength in the EUR was helped as another hurdle in the Greek debt crisis was cleared.

Despite the EUR's three day rally against the USD, with the currency pair holding strong above USD1.3200, market participants don't believe that the tide has turned just yet. Profit taking could be the reason behind the moves, after the strong rally earlier in the month. As mentioned above, William Dudley's speech showed that the Fed is still cautious about the recovery in the US.

He acknowledged that "incoming data on the US economy has been a bit more upbeat of late; that while these developments were encouraging, it was far too soon to conclude that we are out of the woods in terms of generating strong, sustainable recovery".

Housing sentiment in the region was the only other data released overnight, with a worse than expected result. The number for March was 28, which was below expectations of an increase to 30 on the index.

Economic Calendar
20 MAR AU RBA Board Minutes March
AU Conference Board Leading Index
UK CPI
US Housing Starts