Bell FX Currency Outlook: The Australian Dollar has opened slightly higher this morning after a relatively quiet session offshore overnight.

Australia: The local currency was initially lower yesterday, following the release of some weaker than expected June retail sales figures. The AUD fell as low USD0.8850 when data disappointed the market with a flat June outcome.

Offshore the AUD was able to make up some ground back above USD0.8900 on the back of some encouraging services sector data from the US and the UK. The market now awaits the release of local trade figures for June and house price data for the June quarter, due out later this morning.

The Reserve Bank of Australia has it monthly board meeting today and it is almost certain that they will cut the cash rate by a quarter of a percentage point to a new record low of 2.5%.

The AUD is likely to consolidate its overnight gains ahead of local economic data and the RBA meeting.

Majors: The GBP strengthened against the USD overnight after a report showed the services sector in the UK had expanded at its fastest pace in more than 6 years in July. Services activity in the UK jumped to 60.2 in July from 56.9 in June, marking the seventh month of growth.

The improvement in the UK was even stronger than what the services sector in both the Euro-zone and the US have experienced.

This latest piece of UK data just adds to a growing list of recent economic reports that are starting to show that the UK economy is getting back on track. Elsewhere, a report in the US showed the non-manufacturing sector picked up steam in July.

The ISM non-manufacturing PMI increased to 56.0 in July from 52.2 in June. Despite the positive results the USD still ended the session mixed against its major rivals with some traders taking profits on its recent strength. It's a fairly quiet night for data offshore tonight with UK industrial and manufacturing production, German Factory orders and US Trade balance for June.
Economic Calendar
6 AUG AU Trade Balance Jun
AU RBA Cash Rate Aug
UK Industrial Production Jun
US Trade Balance Jun

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