Bell FX Currency Outlook: The Australian Dollar is fairly much unchanged today after the currency markets played out a quiet session as they await the meeting outcomes of the FOMC and the ECB.

Australia: Whilst the overnight action was quiet, financial markets were slightly weaker ahead of the US FOMC Meeting tonight.

The EUR barely moved. It did stage a minor sell off when the German Finance Ministry yet again stated an opposing view to a banking license for the ESM bailout fund. It does feel the fear of an actual collapse in euro zone bond markets may have been mitigated but the market expectations (read "hope") for the FOMC and the ECB appear overly optimistic and expectations of
outcomes need to be measured.

The feeling is that the Federal Reserve is quite likely to either deliver QE this meeting, or at the very least hold out the prospect of such a policy at the September meeting.

This leaves the ECB being the main source of uncertainty, with a particular focus on whether the ECB President has promised action, without first ensuring some support from the members of the ECB Governing Council.

In Australia yesterday, private sector credit rose 0.3% in June to be up 4.4% annualised while building approvals fell 2.5% in June after the 27.0% rise in May.

In Australia today we have house prices with the monthly RP Data series and the quarterly ABS series released. Look for manufacturing PMIs being released around the world today.

We see the AUD catching its breath today, with more potential for a slight pull-back than anything else going into the PMI's today and the FOMC tonight.

Majors: As stated above, the main event tonight is the US FOMC meeting, ahead of the Bank of England and ECB meetings tomorrow night with September still appearing the more likely timing for further QE. Keep watching for ongoing weakness in the labour market and retail sales as a sign to timing of QE.

Terrible unemployment data in Europe was released, where it remained at a record high of 11.2% in June (Spain 25%, Greece
23%, Portugal and Ireland 15% and Italy at 11%).

The Reserve Bank of India left interest rates unchanged and in the US, equity markets were lower overnight and agricultural commodity prices were mixed.
Economic Calendar
01 AUGUST AUD House Price Index 2Q
CH Manufacturing PMI Jul
GE PMI Manufacturing Jul
US FOMC Rate Decision