Bell FX Currency Outlook: The Australian Dollar continues to hover around the USD1.0200 level, despite weaker offshore equity
markets and continued concerns about the European recovery.

Australia: The AUD fell initially during the European trading session as Spanish 10yr bond yields spiked above the dreaded 7%; which was the level reached when other European nations sought international rescue packages.

The weakness was only short-lived, with the AUD back above USD1.0200. Focus will continued to be paid to the Euro-Fin meeting which got underway overnight, and although we are yet to see any headlines released, much attention will be paid to any comments or progress made.

Yesterday we saw the release of ANZ's local job ads, which fell 1.2% in June after a 2.6% decline in May. This didn't have much impact on the AUD with most of the focus on onshore developments likely to come from the release of our local employment data, due out on Thursday.

Today, expect close attention to be paid to the Chinese trade balance data for June, where it is expected to show an increase in the trade surplus in comparison to last month.

Majors: Yesterday saw the release of the Chinese CPI data which came in below market expectations. Markets were expecting a result of 2.3% but instead it came in below at 2.2%. While it's not a large deviation, this does leave Chinese's policymakers with the room to further reduce their reserve requirements and stimulate growth in the region.

There was little direction in the offshore markets overnight, with many investors still watching Europe for further reassurance and developments.

The EUR/USD continues to stay near a two year low, USD1.2300, as investors wait for the outcome of the two European Finance ministers meetings. As mentioned above, due to this uncertainty equity markets across the board were weaker. In Europe, Germany DAX fell 0.4% and the FTSE was down 0.6%. Across the Pacific, in the US the DOW was down 0.3% and the
S&P500 down 0.2%. After the close of markets, Alcoa began the Q2 reporting season with a slightly better than expected revenue and profit result.
Economic Calendar
10 JULY AU Nab Business Confidence
UK RICS House Price Balance
UK Industrial Production
US NFIB Small Business Optimism