Bell FX Currency Outlook: The AUD had a relatively quiet offshore session last night and remains relatively range bound this morning.

Australia: Local markets are now turning their attention to the release of local employment data and Chinese monthly indicators due out later this morning.

Market expectations are for the unemployment rate to have risen slightly to 5.3% in July. Unless the figures differ significantly from
expectations the AUD is unlikely to record any significant movements.

Chinese data will also be scrutinized fairly carefully given the close links between the Chinese and Australian economies. The releases, which include CPI, PPI, retail sales and industrial production, are all expected to show that the Chinese economy is still performing strongly.

The AUD looks to have encountered some solid resistance around the USD1.0600 level at the moment, but many market watchers believe the AUD is still set for another move higher, with USD1.1000 once again back on the radar.

With all of the talk of central bank's diversifying their currency holdings to include higher AUD volumes, and with the reluctance of our own RBA to directly intervene in the currency market, further moves to the topside are looking increasingly likely.

Majors: The USD gained a little ground against the EUR overnight after German Industrial Production for June came in a little weaker than expected and both Spain and Italy had their credit ratings cut by credit ratings agency DBRS.

The BoE's Quarterly Inflation Report noted that the ongoing uncertainty surrounding the Euro-zone remains as the major threat to the UK economy.

In what was a quite gloomy report, the BoE downgraded their forecasts for growth, which pushed the GBP a little lower against the USD. Share markets throughout the Northern Hemisphere failed to record any significant movement either way, with commodity markets also having a quiet session.
Economic Calendar
09 AUGUST AU Unemployment Rate
CN PPI
CN Retail Sales
US Initial Jobless Claims