Bell FX Currency Outlook: The Australian dollar traded in a choppy fashion overnight, in sync with its European counterpart, after yesterday's sovereign ratings downgrades by Moodys.

Australia: A very mixed night can be the only description for last night's market action. There was better than expected European data and successful Italian and Spanish debt auctions but this was offset by Moody's downgrade of six Euro Zone nations and the ongoing Greece bail out negotiations.

It is an understatement to say there is much happening in Europe. The finance ministers were meant to meet but this was changed to a teleconference with Juncker, the head of the Euro finance panel saying overnight that Greece has not yet provided all required political commitments.

Greece has reported that its economy has contracted a whopping 7% last year which is casting doubt over current IMF growth assumptions of a less severe economic contraction of 3% in 2012.

In Australia today, the release of February's Australian Consumer Sentiment is the first since the disappointment of the RBA's "no change" and the subsequent mortgage rises by the Australian Banks, hence any improvement in sentiment would come as a surprise.

Motor vehicle sales for January are released as well this morning. There will be a significant focus offshore on the initial estimate of Euro Zone's GDP for Q4 with the consensus being for a 4% contraction.

Majors: The US Dollar strengthened whilst the EUR weakened and the JPY was also slightly lower after the BoJ expanded its quantitative easing program by another JPY10tn.

Looking to Europe, sovereign ratings for Italy and Spain were cut two notches, Portugal, Slovakia, Slovenia and Malta by one notch, and France, Austria and the UK were placed on negative outlook.

Despite this, Italy and Spain had successful debt auctions in an encouraging sign the ECB's liquidity operations are working.

There was disappointing data out of the US (retail sales) however this was not taken as earth shattering. In addition to tonight's European GDP result, UK unemployment data is due along with US Manufacturing and the Fed's minutes from the Jan meeting in which they disclosed rate forecasts of the FOMC for the first time.

Economic Calendar
15 FEB AUS Westpac Consumer Confidence Index Feb
AUS New Motor Vehicle Sales
EU Euro Zone GDP Q4
US Minutes of FOMC Meeting