A one Australian dollar coin ($1.09) is seen in this picture illustration taken in Sydney April 29, 2011.
IN PHOTO: A one Australian dollar coin ($1.09) is seen in this picture illustration taken in Sydney April 29, 2011. The Australian dollar consolidated near recent highs against a broadly weaker U.S. currency on Friday and within spitting distance a huge chart objective at $1.1000, having enjoyed its best month so far this year. REUTERS/Daniel Munoz

Bell FX Currency Outlook: The Australian Dollar trading back under 80 cents with some assistance from RBA Deputy Governor Phil Lowe’s comments yesterday that the RBA still had scope to cut rates.

Australia: The comments may be self-evident when rates are 2% and much of the rest of the world is at zero. Today’s ANZ-Roy Morgan consumer confidence index (released at 09:30am AEST) will provide the first gauge of consumers’ reaction to last week’s Commonwealth Budget. Recall last year this measure fell sharply in the weeks leading up to and after the release of the budget. At 11:30am AEST, the May RBA Board meeting Minutes are published. While always worth a read, we expect little new information in the Minutes given the release of the Statement on Monetary Policy since the Board meeting.

Majors: The USD found support on wider reporting of last week’s San Francisco Fed research on the Q1 seasonal effect and low liquidity amplified the moves combined with higher US Treasury yields. The dollar also benefited from talk from Fed’s Evans that a June rate hike was still on the table. The NZD continued to struggle as markets digested further housing measures and EUR began paying attention to Greece again. Greek debt concerns continue to intensify over Greece’s inability to make debt repayments to the IMF in June. Greece has said that it will pay wages and pensions at the end of May, but beyond that it will need to reach a deal with creditors. The CAD down over 1% with WTI oil drilled below $60 amidst thin liquidity due to Victoria Day holiday. Speculators are losing faith in the oil rally, after the International Energy Agency reported that Saudi Arabia boosted its output to the highest level in at least three decades.

Economic Calendar 19 MAY

  • AU RBA Meeting Minutes May
  • NZ RBNZ Survey of Expectations (2yr-ahead annual CPI)
  • EC ZEW Survey May
  • US Housing Starts/Building Permits Apr

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