Bell FX Currency Outlook: The Australian Dollar is lower this morning, currently trading around USD1.0550, after mixed data from both sides of the Atlantic failed to provide any real direction during the offshore trading session.

Australia: Following the RBA's interest rate decision yesterday, where interest rates were left on hold at 3.5% (as was widely expected), the AUD did manage to briefly push through the USD1.0600 resistance, but has steadily fallen as investors take some profits.

In the RBA's statement following the decision, it was seen that 'with inflation expected to be consistent with the target and growth close to trend, the stance of monetary policy remained appropriate'.

Europe was also mentioned as a continued 'potential source of adverse shocks for some time', therefore close attention will be paid to developments out of the region, with room to move should the RBA require.

Today during the local trading session we have the housing finance approvals for the month of June, with a small rise expected. It's likely that the AUD will have a fairly uneventful trading session ahead of tomorrow's employment data.

Majors: With a slew of data released from the Euro-zone overnight, unfortunately the majority of it was weak. Italy's GDP in the Q2 contracted, with a result of -0.7% for the quarter and -2.5% for the year. This is the fourth straight quarter of contraction, continuing the recession in the region.

Their industrial production also disappointed, posting a fall of 8.2% in June. The bad news continued with Europe's largest economy, Germany, posting a decline in factory orders of 1.7%, which totally counteracts last month's 0.7% rise. Despite these weak results, equity markets continued to ride the optimism of recent trading sessions.

In the US the DOW was up 0.4% and the Nasdaq up 0.9% on some better than expected earnings announcements. And in Europe, they ignored the poor data, posting gains of 0.7% for Germany's DAX and the FTSE up 0.6%.
Economic Calendar
08 AUGUST GE Current Account Jun
GE Trade Balance Jun
UK BoE Quarterly Inflation Report