Bell FX Currency Outlook: The Australian Dollar is slightly stronger this morning, hitting a one-week high of USD 0.9564, following the release of strong local consumer sentiment figures.

Australia: The Westpac/Melbourne Institute index of consumer sentiment, released yesterday, was above the 100 mark in June for the first time in
two months, indicating that most of the people surveyed were optimistic about the economy.

Since this release, the AUD had since slipped, following US stocks lower. It seems that the AUD is reluctant to shift back higher as we write. Some weakness prevails, maybe in anticipation of the Australian jobs numbers, but more so because the market is focused on the bond market at the moment with yields going higher and it's sending stocks lower.

Big swings remain prevalent in the market. Official Australian employment figures for May, to be released this morning, are expected to show the unemployment rate has risen to 5.6% and the number of people with jobs has fallen by 10k.

We feel that if unemployment hits 5.6% with the very real sense the jobs market is weakening, then we're going to get more pressure on lows for the AUD in the US 0.9300 region. Another focus will be the release of US retail spending data for May, due out during the offshore session tonight, and here, if the US figures are strong then the AUD is likely to fall further, because recently any strong economic announcements out of the US has rallied the stock market and USD.

Majors: Continued EUR resilience was noted last night, while the GBP benefited from a stronger than expected labour market report. The NZD has been the standout performer within G10 currencies in front of this morning's RBNZ decision with a gain of some 1.25%. The RBNZ announced an unchanged OCR at 2.5% as universally expected.

In saying it expects to maintain the OCR here through the end of the year, the central bank continues to stress concerns that Auckland and Canterbury house price inflation does not get out of hand but also stresses the headwinds from a continued overvalued dollar (despite acknowledging the recent fall).

Overall there was nothing to unsettle expectations for a first RBNZ tightening in Q1 2014 or move the NZD significantly.

Economic Calendar
13 JUNE NZ RBNZ Official Cash Rate
AU Unemployment Rate
US Advance Retail Sales