Bell FX Currency Outlook: The AUD is relatively unchanged this morning, currently trading at USD1.0560, ahead of the RBA's interest rate meeting today.

Australia: The positive sentiment out of Europe following the weekend's breakthrough in the Euro-zone debt crisis continued to dominate the markets with commodity prices and equity markets across the board feeling the effects.

The AUD did head back towards the USD1.0600 level during the offshore session, but was unable to break through reaching a high of USD1.0593.

Yesterday saw the release of the ANZ jobs ads data for July which posted 0.8% decrease, after last month's -1.2% result. This continues to show that our labour market is slowing, and gives us an indication as to what we can expect on Thursday when we have the official release of our local employment data.

The RBA will meet today and announce their interest rate decision, due for release at 2:30pm AEST. Expectations are that the RBA will keep the interest rates on hold for the second straight month at 3.5%, with our local economy continuing to remain stable.

It is expected that in the accompanying statement there will again be comments to the affect that 'close attention will still be paid to the developments out of Europe'. We expect that the AUD will trade in a fairly tight range prior to the announcement.

Majors: The EUR/USD was also a beneficiary to the increased optimism, as it seems highly likely that the European Central Bank will provide more relief for financial markets.

The currency pair rallied above USD1.2400 and briefly touched its highest level in almost a month as investors continued to favour the EUR over the USD after ECB President Draghi indicated last week that policy makers were moving closer to a decision to purchase bonds from Euro-zone governments that are having trouble financing their debts.

This positivity extended through to equity markets with the DOW and S&P500 up 0.2% and the Nasdaq up 0.7%. Gains in Europe were stronger with Germany's DAX up 0.8% and the Euro Stoxx 50 up 1.1%.
Economic Calendar
07 AUGUST AU RBA Cash Target
UK Industrial Production
GE Factory Orders
US Consumer Credit