Australian Dollar Outlook -08 July 2014

Bell FX Currency Outlook: The Australian Dollar is sitting comfortably around the mid-high 0.93's and it will be hard to see us break out of this until the jobs numbers on Thursday.

Australia: ANZ job advertisements rose 4.3% m/m in June, retracing part of May's large fall and returning to levels seen three months ago. Despite
the recent soft patch, job ads are 6% higher than at the start of the year, suggesting labour demand is very gradually improving. For the AUD, confidence data will also be closely watched this week, any positive data surprises will support the AUD given the current market pricing of rate
cuts.

Majors: There was little follow through from the post payrolls USD rally despite US markets return from holidays. The stock market weakened as
expectations of higher interest rates rose, however, bond yields retraced marginally. This left the USD struggling broadly, with even the EUR rising
despite weaker than expected industrial production data.

The NZD outperformed, today in New Zealand the quarterly business survey is expected to weigh on the currency. For the broader USD the Federal Reserve meeting minutes will be the key focus. Investors will need to see evidence that members are becoming concerned about inflation for the USD uptrend to reassert.

Weak German data overnight kept alive expectations that the ECB may need to loosen monetary policy further in coming months in the face of disinflationary pressures and subdued economic growth. Data revealed German industrial output fell 1.8 percent in May. The largest drop in more than two years, again highlighting the growing divergence between the US & European economies.
Economic Calendar
08 JUL AU NAB Business Confidence/Conditions
GR Current Account Balance
US Consumer Credit

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