Bell FX Currency Outlook: Overnight the AUD fell below USD1.0300; currently trading at USD1.0260, as concerns regarding the stability of Europe once again plague the markets.

Australia: With a lack of influential local data released during yesterday's trading session, we saw the AUD weaken as the day progressed, following the lead from our local equity markets. This weakness continued overnight as concerns regarding the stability of Spain and the accompanying Eurozone were once again in the minds of investors.

Equity markets, commodity prices, as well and the local currency were all affected by the concerns. The Bank of Spain estimated that we will see next week's GDP figures for the region fall a further 0.4% in the second quarter, after the 0.3% drop in the first quarter.

This release, as well as the news that the Spanish 10-yr bond yield hit a fresh record high above the dreaded 7% market, saw some risk adverse trading patterns.

Today during our local session RBA Governor Stevens is speaking at a luncheon in Sydney, but this is unlikely to have any material effect on the AUD. With concerns regarding Europe back in the news, we could see some volatility in the AUD and a possible pull back towards parity should markets deteriorate further.

Majors: The EUR/USD also followed the weak trend overnight falling to a two-year low against the USD as more Spanish regions ask for financial support from the country's government and Greece faces new financial troubles.

The EUR/USD fell to a low of USD1.2067 but has since found some support around USD1.2100. European equities were hit hard; as reports came out that the IMF will refuse to provide any more financial aid to the region. While these comments have since been refuted, it was enough to spook markets.

Germany's DAX was down 3.2% while the FTSE100 was down 2.1%. Across the Atlantic the US equities also felt the effects, with the S&P500 closing down 0.9% the DOW down 0.8% and the Nasdaq lower by 1.2%. Today during our local trading session we will see the release of China's HSBC Manufacturing PMI; while during the offshore session the Euro-zone will also release its Manufacturing and Service PMI data.
Economic Calendar
24 JULY AU RBA's Stevens Speaks
CH HSBC Flash Manufacturing PMI
US Richmond Fed Manufacturing Index
US House Price Index