Bell FX Currency Outlook: The Australian dollar was sold back down through USD1.0500 overnight as another round of USD buying emerged.

Australia: The AUD remains vulnerable to further sell offs in the short term as markets focus their attention on the possibility of a slowdown in commodity price growth. Yesterday's comments from BHP on the slowing of steel output in China sparked the initial sell-off.

An economic slowdown in China, Australia's biggest trading partner, would have serious ramifications for the local economy and the AUD.

Markets will be paying very close attention to Chinese data releases over the coming weeks, including today's PMI data, looking for further evidence of how the Chinese economy is actually performing.

RBA official Guy Debelle is due to speak in Sydney this morning but it is widely expected that his comments will be in line with recent comments from other RBA officials.

NZ GDP figures were released earlier this morning with fourth quarter GDP growth weaker than expected. NZ GDP grew by 0.3% in the final quarter of December 2012 - well below the median expectations for growth of 0.6%. The NZD lost further ground against the USD on the back of the data release.

Majors: The USD gained against most of its major counterparts overnight, benefiting from safe-haven flows. Market sentiment turned negative on weaker than expected US housing data and the release of the UK Government's budget. Global equity markets were relatively quiet, with small losses recorded in both the US and Europe.

Oil prices continue to creep up and this is another factor which has the potential to stifle future economic growth. With the US economy beginning to show some signs of life, ongoing high oil prices will make their economic recovery even more difficult.

There was some slightly more encouraging news out of Europe with the Greek Prime Minister winning approval for a EUR130bio aid
package.

Economic Calendar
22 MAR EU PMI Manufacturing MAR
UK Retail Sales FEB
US Housing Price Index JAN