Bell FX Currency Outlook: The Australian Dollar tested the USD1.0220-50 resistance window overnight while Greece finally swore in a coalition government and the US Federal Reserve continued "the twist".

Australia: The Australian Dollar opens unchanged from yesterday's close having tested USD1.0220 overnight and sold off after the US Federal Reserve decision. The USD1.0220-50 area will be hard to break initially due to overbought indicators several technical resistance levels.

Yesterday we saw Australia first quarter dwelling starts released which showed a decline of 12.6% down from -6.9% previously. Today we see the Reserve Bank release its June quarter Bulletin and HSBC China flash manufacturing PMI for June.

Majors: The minutes were released from the Bank of England's June meeting and showed the MPC voted 5-4 to keep asset purchases unchanged.

The FTSE index was higher after the minutes release and that most MPC members acknowledged that "further stimulus was likely to be warranted at some point."

In Greece, the coalition government of New Democracy, PASOK and Democratic Left was sworn in. The first focus of the new government is to get bailout terms softened at next week's EU Summit, with better policies for growth and a time frame extension.

Spanish 10 year bond yields were down 30bps to 6.66% and Italian bond yields down 15bps to 5.74%. The US Federal Reserve lowered growth forecast to a maximum of 2.4% for 2012 (down from 2.9% in April).

Unemployment is expected to rise to 8.2% in 2012 and 8.2% in 2013. Federal Reserve Chairman Ben Bernanke announced an extension of "Operation Twist" to the end of 2012 and left the door open for additional policy easing.

The Fed is committed to purchasing USD267 billion of US Treasuries with remaining maturities 6-30 years while redeeming and
equal amount of Treasuries with remaining maturities less than three years. This will keep rates near zero and the Fed will keep ultra-low rates through to late 2014. Bernanke noted that European sovereign debt crisis had a bearing on the Fed's decision. It appears they are keeping their powder dry. US equity markets closed relatively unchanged.

Oil prices fell sharply as US oil inventories grew unexpectedly. WTI futures fell 2.7% to US81.8 per barrel

Economic Calendar
21 JUNE AU Foreign Exchange Transaction MAY
NZ GDP Q1
EU PMI Manufacturing JUN
US Existing Home Sales MAY