Bell FX Currency Outlook: The Australian dollar was slightly stronger overnight following the release of weak retail sales figures in the US.

Australia: The AUD is currently trading around USD0.9100 this morning after hovering below this level for most of yesterday. Q2 GDP data out of China came in on expectations yesterday, helping to support the AUD throughout the afternoon session.

Overnight, figures in the US showed Retail Sales rose 0.4% in June, weaker than the 0.7% that analysts had expected.The market took this as a sign that the US economy was still in the early stages of recovery which may mean the US Federal Reserve
may hold off on winding back its economic stimulus.

On the day minutes of the July RBA meeting are the main domestic event. Analysts will watch closely for clues to see just how close the RBA board was to deciding on a rate change and whether or not an interest rate cut is on the cards in August.

Majors: The USD gained ground against the EUR and the JPY Monday night despite some weak economic numbers released in the US. The softer retail sales figures were a disappointment but the market quickly moved forward and began preparing for Mr. Bernanke's first Congressional testimony in Washington on Wednesday and Thursday.

Analysts are looking for a more measured, slightly hawkish tone from Bernanke, in the wake of last week's severe overreaction to his comments. It's likely that the Fed chairman will attempt to further clarify the timing distinction between when the Fed will slow its bond purchases and when it will begin to lift interest rates. Offshore tonight we have the latest UK inflation figures, German ZEW survey, US CPI, Industrial Production, TICS data and the NAHB Housing Market Index.
Economic Calendar
16 JULY AU RBA Policy Meeting Minutes
US CPI
UK CPI
EC CPI

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