Bell FX Currency Outlook: The Australian dollar has rallied strongly overnight, pushing up towards USD0.9800 on the back of weaker manufacturing numbers in the US.

Australia: After treading water for much of yesterday, the AUD has opened stronger this morning trading around USD0.9760 at the open. Despite a mix of local data released here yesterday, the AUD failed to find new direction and was pretty much contained within recent trading ranges.

Chinese manufacturing data also weighed on the local unit yesterday with China's HSBC manufacturing revised down in May. It wasn't until overnight following the release of some weaker than expected ISM Manufacturing in the US that the AUD found some legs and rallied to an overnight high of USD0.9792 before consolidating.

Today we have the RBA meeting at 2:30pm AEST, with the market well and truly priced for no change. Only one out of the 25 economist surveyed expect a cut so no doubt if the RBA surprise the market again we are likely to see a sell-off back into the USD0.9600's.

Majors: The USD fell sharply against most major currencies overnight after a disappointing manufacturing report weighed heavily on investors.

The closely watched report showed manufacturing activity contracted in May to its lowest level in almost four years, prompting a sell-off of the USD across the board.

The weaker numbers raised concerns about the US economic recovery and also led investors to question whether or not the
Fed is still going to pull back on its monthly bond purchases as previously first thought.

Elsewhere the EUR and the CHF were higher with the EUR recovering from around $1.2960 to touch $1.31. The GBP reached a three week high against the USD, trading at $1.5315 from $1.5199.

Tonight in the US we have Trade balance numbers being released along with two Federal Reserve speakers.
Economic Calendar
04 JUNE AU RBA Cash Target
AU Current Account Balance
US Trade Balance
EC Euro-Zone PPI