Bell FX Currency Outlook: The Australian Dollar is trading relatively unchanged this morning from yesterday's levels following a choppy night of trading with equities mixed, US Treasuries little changed and upward pressure on European bond yields.

Australia: The AUD's trading pattern is resecting 1.0300 for the moment it seems. Forward looking indicators of the global economic cycle are suggesting that China is achieving its rebalancing (soft landing) and that the US economy is consolidating.

The key focus in Australia today is the release of the Reserve Bank of Australia March Board Meeting minutes with the markets looking for any further insights into the Board's frame of mind and thinking in relation to potential easing in May and beyond.

Readers will recall the RBA kept the cash rate on hold at 4.25% in April but indicated a May rate cut was likely, provided consumer price index (CPI) data, to be released later this month, shows inflation is under control. We do feel here that if there is evidence of more cuts, then the AUD will come under pressure to test and break through 1.0300 with October 2011's lows ~ 0.9600 coming into play.

Majors: The US Dollar was relatively weaker as the EUR suffered on concerns regarding Spain and Italy. Positive US retail data was a welcome boost to sentiment. March retail sales rose by a stronger than expected 0.8% (month on month). Empire state manufacturing fell sharply but the main story and feeling is unchanged and that is current conditions are easing and expectations are holding.

Elsewhere, the Spanish central government stated it will intervene in regional governments if their administrations are unable to enforce their own budgetary limits. Focus will remain on Spanish debt auctions this week ahead of the G-20 Finance & Central Bankers meeting in Washington on Friday where the agenda includes financing Europe's bail-out funds. The Bank of Canada is expected to leave rates on hold at 1%.

Economic Calendar
17 APR AU RBA Board Minutes
AU New Motor Vehicle Sales
UK CPI
US Housing Starts
US Building Permits

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