Bell FX Currency Outlook: While the Australian Dollar briefly pushed through USD1.0300 late in our trading session yesterday, it has since retreated back, currently trading at USD1.0260, as markets wait for the outcome at tonight's European Central Bank meeting.

Australia: With the US markets closed overnight for Independence Day, markets were thin. However much of the talk was focused on tonight's meetings by both the ECB and the Bank of England. Many are expecting that both of the central banks will announce some form of stimulus.

Markets are expecting the ECB to reduce interest rates by a further 0.25% (following last month's cut), and the BOE are expected to increase their asset purchase target by a further GBP50bn. The AUD weakness overnight mirrored the European equity markets; with Germany's DAX losing 0.2% and the FTSE down 0.1%.

The AUD/EUR also pushed through EUR0.8200 overnight as it benefited from a weaker EUR/USD.
Today during our local session we have the release of international trade
data. This is unlikely to have much of an impact on the AUD, as the
markets await tonight's offshore announcements.
Majors: As mentioned above, most economists are expecting the ECB to
cut their interest rates in the hope to further stimulate the ailing region.
While the majority are expecting only a 0.25% cut in the rate, some are
hoping for a cut that is twice a deep. Given that the unemployment rate
still remains at critically high levels (11.1% in May) and their manufacturing
data continues to disappoint; after the positive response following the EU
Summit last week, investors are hoping that the joy will continue with a
0.5% cut. On the back of the uncertainty, the EUR/USD weakened and is
this morning trading close to USD1.2500. Across the other side of the
Pacific, many investors are looking towards Friday's non-farm payroll data
for further hints on the path of monetary policy in the US. Some recent
disappointing data has increased the expectations for a possible QE3 in
the near future.
Economic Calendar
05 JULY AU Trade Balance
UK BOE Monetary Policy Decision
EU ECB Interest Rate Announcement
US Initial Jobless Claims