Bell FX Currency Outlook: The AUD has pushed through USD1.0500 after dovish comments from the Fed Chairman Ben Bernanke saw a selloff in the USD.

Australia: Given the recent positive statements from Bernanke regarding the state of the US economy, his speech and its views on the current unemployment market came as a surprise. He said that while the employment market has been improving, he cautioned that labour markets were still relatively stagnant, which raised questions whether the recent dip in the unemployment rate was sustainable.

Many thought the previous positive comments would see US interest rates increased sooner rather than later, but last night reaffirmed that their interest rates will remain low for the foreseeable future.

As a result, the AUD has strengthened as investors continue to partake in the carry-trade investment. Given our interest rate is high, relative to that of the US, investing in the AUD will give a greater return than in the US. With the lack of data due for release this week, we can expect that the AUD will continue to look for offshore developments to give it some direction.

The current level for top-side resistance is USD1.0560; however even if it does push through this level, we believe that it would need to head back towards USD1.0700 to breakfree of the current bearish trading pattern.

Majors: The EUR/USD was stronger overnight as Germany's Chancellor Merkel backed an increase in the EU firewall to ease concerns of the economic stability of Spain. Comments that the current temporary rescue fund could merge into a permanent one was a positive for the region.

This, as well as the weakening USD saw the EUR/USD push up towards USD1.3400. This progress with the firewall shows that the Euro-zone may be learning from its past mistakes and trying to pre-empt issues before they turn into another large issue for the region.

Still in Europe, Germany's Ifo posted a modest improvement which shows that there is merely a mild recession in Europe. The Ifo Expectations Index rose to 102.7 in March, and given that this activity index has a better track record than last week's PMI, this showed that Germany's economy continues to outperform its other European counterparts.

Economic Calendar
27 MAR UK CBI Reported Sales
GE GfK Consumer Confidence
US Consumer Confidence
US Richmond Fed Manufacturing Index