Bell FX Currency Outlook: The Australian Dollar is a quarter of a US cent higher, helped by some positive European economic data and higher metals prices.
Australia: Economic growth in the Euro Zone was 0.3% in the June quarter, the first positive number in 18 months and it was these figures that seemed to be one of the main sources of the AUD higher.
This barely recaptures the 0.2% lost output in Q1 and with growth over the year still down at -0.7%, no doubt the first quarterly growth for nigh on two years (since the third quarter of 2011), should at least help to support confidence. Additionally, commodities are higher, particularly copper and iron ore.
With the USD somewhat on the defensive overnight, the AUD has recaptured its ground above 0.9100, having eased back through the local session yesterday in the wake of a reasonable consumer sentiment reading.
However, soft wages growth assisted to keep the RBA's easing bias in play for the months ahead. We expect a quiet day with the AUD starting to appear range-bound amongst a general lack of volatility.
Majors: As written above, the EUR slipped slightly against the USD despite positive data. The data had been expected and the EUR has been stronger since mid-July, possibly explaining Wednesday's unenthusiastic reception by traders. The JPY recovered slightly from Tuesday's fall.
The GBP gained, while the USD rose against the CHF. US Dollar US PPI inflation eased in July, core PPI +0.1%/1.2%, slightly below expectations and weekly mortgage applications were down 4.7%.
BoE Minutes released overnight reflect some disquiet over rising UK gilt yields and running as some counter to their forward guidance to signal low rates for longer.
15 AUG AU Consumer Inflation Expectation August
UK Retail Sales July
US Fed Governor Bollard (VM) Speaks on US economy
CA Existing Home Sales July
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