Bell FX Currency Outlook: The Australian Dollar has opened below parity this morning following some renewed strength in the USD overnight.

Australia: The AUD has opened around USD0.9950 today after trading below parity for much of the overnight session. Downward pressure on the local currency began yesterday following some weaker than expected industrial production figures out of China.

Industrial output only rose 9.3% in April which was less than the 9.5% gains the market had been expecting. China is the biggest buyer of hard commodity exports out of Australia so the results weighed on the currency.

Overnight some better than expected retail sales data in the US also weighed on the AUD pushing it down to USD0.9940, its weakest level against the USD since June 2012.

On the day we expected the AUD to range trade below parity ahead of tonight's federal budget.

Majors: The USD extended its gains on Monday as better than expected retail sales raised expectations for a pullback in Federal Reserve stimulus later this year.

The USD rallied against the JPY, EUR and other major currencies after the data showed retail sales rose 0.1% in April, beating
expectations for a 0.4% decline.

This latest piece of positive data has heightened expectations that the Fed may start pulling back on its $85 billion a month bond buying program this year, which would help the USD's value.

Meanwhile the EUR fell to $1.2975 from $1.2990 after ECB official and head of Italy's central bank Ignazio Visco said negative deposit rates would be an effective stimulus measure.

There is a fair bit of data offshore this week including industrial production, CPI and consumer sentiment in the US, while the Bank of Japan issues its monthly policy statement Thursday.
Economic Calendar
14 MAY AU 2013-14 Australian Federal Budget
GE ZEW Survey (Econ. Sentiment/Current Situation)
NZ Retail Sales Ex Inflation (QoQ)