Australian Dollar Outlook - February 4, 2014

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By Christine Gaylican | February 4, 2014 12:34 PM EST

Bell FX Currency Outlook: The Australian Dollar continued to range trade overnight ahead of the Reserve Bank of Australia's February cash rate decision today.

Reuters
The AUD rides on a wild spin before the RBA decides on key rates today

Australia: After trading within familiar ranges yesterday, the AUD briefly broke back above USD0.8800, reaching USD0.8834. The AUD spiked
following weaker than expected US manufacturing data.

The Institute for Supply Management's purchasing manager's index showed US manufacturing sector growth slowed sharply, dropping to 51.3 from 56.5 in January.

However the AUD's rally was brief and the local currency settled back below USD0.8800 ahead of today's RBA meeting. While today will be key for the AUD, it is widely expected to leave the cash rate on hold at 2.5%.

Majors: It was a mixed night for currency markets overnight, while equity markets didn't perform well at all. The main catalysts for the mood was the
surprisingly weak US manufacturing data as mentioned above.

The fact that the recent severe weather looked to have an impact on the number didn't help ease the market's reaction with the Dow down -3.3pts to 15,396. European equities also retreated at the end of their session, despite better than expected European ISM readings released earlier.

The EUR did however benefit off the back of the better than expected manufacturing data throughout he Euro-zone, while the GBP failed to gain
momentum, despite a solid ISM reading released in the UK. There is not much in the way of key data releases offshore today.
Economic Calendar
04 FEB AU RBA Cash Rate Target
US ISM New York
NZ ANZ Commodity Price

For latest pricing, ranges, visit www.bellpotter.com.au

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(Photo: Reuters / )
The AUD rides on a wild spin before the RBA decides on key rates today
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