Bell FX Currency Outlook: The Australian Dollar is relatively unchanged this morning, currently trading at USD1.0470 as low trading volumes make it hard for the AUD to hold onto the gains experienced following the RBA's release yesterday.

Australia: The minutes released yesterday from the RBA's August meeting had a somewhat positive tone, reducing the likelihood of further interest rates cuts this year.

Many of the factors influencing the RBA's cautious tone in the past, including the offshore concerns especially surrounding Europe, have eased somewhat; and while the international outlook continues to be weak, our main trading partners are almost 1% above the global forecasts.

Our local economy remains resilient with some signs that the past monetary policy easing has helped in stimulating our economy.

Following this release the AUD rallied over half a US cent, heading back towards USD1.0500, but it has since retracted slightly this morning. With a lack of local data due for release today, we can expect the AUD to trade in a fairly tight trading range today, looking to tonight's offshore session for further direction.

Majors: The EUR/USD was the major winner overnight as encouraging headlines out of Europe dominated the markets. There continues to be a feeling of optimism within investors that the ECB will do everything in its power to rescue the ailing region, and in turn this has boosted the local currency.

The rumours pushed the EUR/USD to a six week high, getting very close to hitting USD1.2500. Whilst European officials continue to deny that there is any plan in place, many are expecting a 'game changer' from the ECB in the form of potential intervention in Spanish and Italian bond yields. This also boosted the local equity markets with the EUR Stoxx up 1% and Germany's DAX up 0.8%.

It was a different story across the Atlantic with the US equity markets unable to follow Europe's lead and posting small losses. The S&P 500 was down 0.3% and the DOW was down 0.5%.
Economic Calendar
22 AUGUST AUS Westpac Leading Index Jun
US Existing Home Sales Jul
Fed Releases Minutes From Aug 1 FOMC Meeting

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