Bell FX Currency Outlook: The AUD has rallied back towards USD1.0350 following last night's FOMC statement release.

Australia: Essentially there was little new news within the statement but the USD weakened after the release and, as a consequence, the AUD was pushed higher. Following the release of weaker-than-expected Australian CPI figures on Tuesday, the AUD was sold off quite aggressively and tested down around the USD1.0250 region.

But solid buying interest began to emerge and the AUD has since recovered some good ground. A 25bp cut in official interest rates at next week's RBA Board meeting has been priced in by the markets, with another cut in June also now a distinct possibility.

Expect the AUD to remain within the USD1.0250 - USD 1.0400 range leading into next week's meeting unless there is further volatility in the European markets. In NZ this morning the Reserve bank of New Zealand has left their official cash rate unchanged at 2.5%.

Of interest for currency markets was the mention of potential to use monetary policy to try and weaken the NZD, which like the AUD, has remained stubbornly high, hurting the country's exporters

Majors: The release of the Fed statement had little effect on financial markets overnight with Ben Bernanke reiterating the view that the US economy continues to grow at a moderate pace and that interest rates will remain at record low levels until at least 2014. The USD was sold off a little against most of the other majors, while base metal prices were generally higher.

Equity markets managed to record some solid gains following better than expected earnings reports from Apple and Boeing.

The GBP may come under pressure in coming days following the release of preliminary GDP data that showed the UK economy has fallen back into recession.

The situation in Europe is unlikely to improve anytime soon with ECB President Draghi, who was speaking before the European Parliament, providing a downbeat assessment on the outlook for the Euro-zone.

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