Bell FX Currency Outlook The Australian Dollar has strengthened slightly since yesterday on comments from ECB President Draghi.

Australia: The main focus overnight was the ECB meeting which proved eventful with ECB President Draghi saying a sustained appreciation in the exchange rate had the potential to alter the inflation assessment and that the exchange rate was very important for growth and inflation. He re-iterated the EUR is not a policy target and that nominal and real exchange rates are in line with long-term averages. EUR/USD rallied close to a big figure as a result. Both the AUD and NZD were dragged higher by these moves with the AUD heading back towards 1.0300 though not threatening that particular level just yet. Today the market will focus on China trade data for February and then the US payrolls report later tonight. China also releases its February data dump on the weekend as well. In Australia, the Western Australian state election will occur this Saturday, March 9, with the polls favouring the incumbent Liberal Party and National Party, which together have been in Government since 2008.

Majors: As stated above, Draghi's comments were market moving. He did also say a rate cut was discussed, but the prevailing consensus was to keep rates on hold. The ECB remains optimistic that growth will recover later this year, citing base effects for downward revisions to its growth forecasts. Positives for growth include an easing fiscal drag, the better global outlook and continued monetary accommodation. The ECB also still believes monetary policy transmission is not working properly, which presumably provides another reason not to cut interest rates. The GBP was stronger following the Bank of England's meeting, as no change to policy disappointed some investors looking for an announcement that the bank would make additional asset purchases. In the US, stronger-than-expected jobless claims data resulted in US Treasuries selling off at the long end of the curve. The key focus of the markets tonight will be the US non-farm payrolls data for February with market expecting 165k jobs were created in February, which is a slowing in growth from the 200k month average rise in nonfarm payrolls during Q4 2012.

ECONOMIC CALENDAR

08 MAR US Change in Non-Farm Payrolls

US Unemployment Rate

JN Gross Domestic Product

09 MAR CH Consumer Price Index

CH Retail Sales

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