Bell FX Currency Outlook: The Australian dollar fell to a 3 month low against the USD overnight as investors once again sold out of higher yielding assets.

Australia: Global equity markets and commodity prices fell throughout last night's offshore trading session as attention began to shift back to the ongoing debt problems in Europe. Spain is now the focus for investors, and following a relatively unsuccessful Spanish government bond auction overnight.

Many are beginning to suspect that Spain may the next Eurozone country to seek a Greek-style bailout. The AUD had already been under pressure over recent days due to remarks from both the RBA and the Federal Reserve, so the re-emergence of European debt problems
only added to the selling pressure.

Key support around USD1.0250 seems to have held for now, and given the lead into the Easter break, we expect the AUD to consolidate around current levels in the short term.

Majors: Spanish 10-year bond yields rose to a 12 week high of 5.71% last night following a Spanish government bond auction where only EUR2.59 bio of bonds were sold in comparison to the governments maximum target of EUR3.5bio. The Spanish Prime Minister added to market nerves by stating that Spain's situation is one of "extreme difficulty" .

The ECB decided to leave its main refinancing rate at a record low of 1% and ECB President Mario Draghi said that the outlook for the euro-zone remains subject to "downside risk".

The negative market tone drove the EUR lower against most of the other major currencies. Market attention is now turning to Friday night's release of non-farm payrolls data due out in the US.

Economic Calendar
05 APR UK Industrial Production FEB
US RBC Consumer Outlook Index APR
CA Unemployment Rate