Clare Mason holds A$15.96 in her hands, the amount she earns in one hour on the minimum wage, at the Gujaga Child Care Centre La Perouse June 18, 2013.
IN PHOTO: Clare Mason holds A$15.96 in her hands, the amount she earns in one hour on the minimum wage, at the Gujaga Child Care Centre La Perouse June 18, 2013. Mason's duties include feeding, playing and participating in educational activities for the young children who are dropped at the centre by their parents during their work day. She admits that after paying her living expenses for the week that include A$150 for rent, A$80 for food, A$60 for a phone, A$30 for petrol, and A$200 for entertainment, she saves about A$20 a week. Picture taken June 18, 2013. REUTERS/David Gray

Bell FX Currency Outlook: The Australian Dollar rose above 79 cents overnight, maintaining its strength against a weaker USD.

Australia: The AUD has finished up flat over the last 24 hours, currently trading around 0.7870. It was a whippy session for global markets, with offshore data in both Europe and the US the driver. The AUD spiked to a high of 0.7938 following the US CPI release, but gains were just as quickly given back as the USD consolidated. The RBA will release its bi-annual Financial Stability Review at 11:30am AEDT. While last week’s RBA Minutes did not point to increasing concerns about house prices, the RBA continue to remain watchful as more rate cuts appear likely. We will get a much more detailed view of the Bank’s thinking on housing in today’s report.

Majors: In the US headline CPI printed in line with expectations in February, rising 0.2% m/m to be unchanged over the year, while the US Markit preliminary PMI survey recorded a modest increase to 55.3 from 55.1. However the Richmond Fed manufacturing PMI disappointed, declining from 0 to -8. As was the case against the AUD, the USD lost ground against most currencies immediately after the CPI release, but just as quickly retraced the move. The GBP was the worst performing of the G10 currencies, down 0.7% overnight following some weaker than expected CPI data. Annual headline inflation hit zero for the first time in the (post-1989) history of this particular series (although the longer standing Retail Price Index (RPI) hit -1.6% during the GFC). It was an interesting session for the EUR, rallying against the USD from 1.09 to above 1.10 before giving back any gains and briefly trading on a 1.08 handle. The preliminary read of Eurozone March composite PMI rose to 54.1 (53.9 expected), which was the highest reading since March 2011. While the services sector is leading the revival in the euro area, the manufacturing PMI continued to improve. Tonight we have the German IFO, US durable goods orders and Chicago Fed President Charles Evans speaks.

Economic Calendar 25 MAR

  • NZ Merchandise Trade
  • AU RBA Financial Stability Review released
  • AU Skilled Vacancies MoM
  • US Durable Goods Orders

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