Bell FX Currency Outlook: The Australian Dollar has opened higher this morning following comments from US Federal Reserve Presidents overnight that the market may have overreacted to last week's Fed Statement.

Australia: The AUD is trading around USD0.9250 this morning, up from USD0.9170 on Monday. After falling as low as USD0.9148 on Monday on concerns about a rising credit crunch in China, the AUD recovered overnight in volatile trade.

It was suggested by two Federal Reserve presidents that the market's reaction to last week's Fed statement was overdone and cautioned financial markets against overreaction.

This followed a similar warning from Fed "watcher" Hilsenrath over the weekend. The AUD strengthened as high as USD0.9300 before settling back near USD0.9260 towards the end of the last night's session.

While there is no key data in Australia today we have some key data releases offshore tonight in the US.

Majors: The USD fell against most major currencies Monday night as traders continued to speculate on the direction of Federal Reserve policy.

The USD erased earlier gains after two regional Federal Reserve presidents cautioned the market about over-reacting to the latest Federal Reserve Statement. Minneapolis Fed President Narayana Kocherlakota said there is a "misperception" that the Fed has turned toward tighter monetary policy.

While New York Fed President Dudley also reiterated that the central bank should continue its easy-money policies especially given the volatility in the market.

Tonight the market has some key data releases to digest including Consumer Confidence, Durable Goods Orders and New Home Sales.
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