Bell FX Currency Outlook: The Australian dollar has rebounded strongly overnight, back above USD0.9200 after trading as low USD0.9110 yesterday.

Australia: The AUD has had a volatile couple of trading sessions but it was one of the better performers Monday night. After coming under selling
pressure Monday due to the release of some weak data in China, the AUD rebounded to a high of USD0.9254 last night on the back of solid gains in
commodity and equity markets.

The AUD has opened this morning around the USD0.9235 level as it waits for today's all important RBA interest rate announcement at 2.30pm (AEST). While there is little expectation of a rate cut, attention will be paid to the tone of the commentary in the press release.

The market is expecting the RBA to retain its easing bias but think it's unlikely to cut interest rates again until we see further deterioration in
the economic outlook or clearer signs that the May interest rate cut has failed to have the effect the RBA were hoping it would have to confidence
and economic activity.

Majors: The USD was supported overnight by better than expected manufacturing data, which saw US manufacturing ISM rise to a threemonth
high of 50.9 in June from 49.0 in May. Investors said that the modest improvements in manufacturing indicators will likely allow the Federal Reserve to follow through this year with plans to begin winding down a bong-buying program that has weighed on the USD.

Elsewhere in Europe, industrial output showed improvement, once again helping to alleviate fears that the world economy might be headed for a slowdown.

Spain's purchasing managers' index for June stabilized, following 25 months of contraction with a reading of 50, the highest level it's been in
two years. The rate of contraction in Italy was also slower, where the PMI reading was 49.1 in June, up from 47.3 in May.

In the UK, the manufacturing PMI rose from 51.5 to 52.5 also setting a positive tone for the session. Tonight in offshore we have some more key data including US Factory orders for May, Eurozone PPI for May and the UK construction PMI for June all being released.

Economic Calendar
02 JULY AU RBA Cash Target
UK PMI Construction
EC Euro - Zone PPI

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