Bell FX, IG Markets Currency Outlook: The Australian Dollar has returned from the Easter break slightly better ahead of the Reserve Bank of Australia announcement later today.

AUD/USD recovered from below $1.04, and managed to post a high of $1.0432. The pair remains steady ahead of the RBA meeting, IG Markets strategist Stan Shamu has pointed out.

In the offshore trading, with markets fairly subdued with the Easter long weekend, the AUD traded in a fairly narrow range between USD1.0387 and USD1.0439, Bell FX analyst Leanne Terrett, on the other hand, noted

Australia. Apart from the initial reaction to the Eurozone developments, the AUD has seemed to shrug off much of the hysteria and has continued to hold firm, trading up towards the USD1.0500 level last week, the Bell FX analyst added.

Markets will be keen to see as the inflation outlook would afford scope to ease policy further, should it be necessary to support demand. Mr. Shamu said that given the improvement in some of the domestic data points, the risk bias will be eased and run a neutral mantra.

Majors: Major markets were broadly unchanged yesterday with European markets closed for the Easter holiday.

A weaker than expected economic data from the US showing a slower manufacturing activity in March slashed the dollar's value against most of the major currencies, Bell FX said.

"The Institute for Supply Management's manufacturing index fell to 51.3 in March from 54.2 in February. The disappointing US data may be a sign that the US recovery is slowing and this weighed on equities as well as the dollar," Ms Terrett of Bell FX noted.

With the USD losing ground, USD/JPY plunged to a low of 93.17 and remains quite depressed heading into this week's BoJ meeting. Analysts have pinned this as the key event of the week, being Haruhiko Kuroda's first meeting at the helm. It will be a bold move to be short the pair heading into the meeting, as he is likely to announce some significant easing steps, added Mr. Shamu said.

While the EUR and the GBP's value improved slightly, markets return to normal this week amidst political developments in
Europe will be the focus as well as the rising tensions in Asia with the posturing of North Korea against neighboring South Korea.

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