Bell FX Currency Outlook: The AUD has continued its firm tone from Friday's trading, as it appears a new coalition government will be formed in Greece between the New Democracy Party and PASOK, giving them control of 161 seats in the 301 seat parliament.

Australia: The "risk on" mentality which started on Friday with firmer equity markets in Europe and the United States, has continued to flow through to the AUD, with it trading in the low 1.0100's this morning. Although the general feeling was that Greek voters would probably not vote for the radical left wing Syriza Party, who believe the austerity package agreed to by the previous government should be repudiated, there still remains a lot of work to do with many in Greece calling for some changes to the reforms.

The German finance minister has suggested that the ECB, EU and IMF might be able to review the situation if a middle of the road coalition government is formed. These events centred in Europe will continue to influence the direction of the AUD in the short term.

Minutes from the RBA's meeting earlier this month will be released tomorrow, and then we have the quarterly RBA Bulletin on Thursday.

Majors: Although in the short run all markets have breathed a sigh of relief, some recent news out of the US on Friday was not nearly as upbeat as we have seen in recent months. The US University of Michigan consumer sentiment preliminary survey for June printed at 74.1, which was much worse than expected (77.5), and decidedly lower than the final May reading of 79.3.

Consumer sentiment had improved for each of the past nine months. Industrial production unexpectedly fell by 0.1% in May versus an expected rise of 0.1%.

The market will be watching the results of the FOMC meeting next week for further indications of more financial stimulus or the extension of Operation Twist which is due to end at the end of this month.

On Friday, the Bank of England unofficially announced a joint easing program in conjunction with the UK Treasury. It appears they will lend funds to banks at very low rates on the condition the funds are lent out and also buy short term gilts from the market. Most analysts believe further easing will be confirmed in mid-July as a precaution to the ongoing turbulent economic conditions in Europe. The G20 meeting begins in Mexico today and we would expect no radical announcements.
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