By Gary Howes

The Australian dollar (AUD) has two major event risks clouding the outlook for the week ahead.

Aus dollar performance going forward will be largely a result of the rhetoric in the RBA minutes released early tomorrow morning.

Sterling remains on the front foot and this should keep the pound in a decent position ahead of the inflation reading.

A look at the Aus dollar exchange rate complex shows:

The pound sterling to Australian dollar exchange rate (GBP-AUD) isThe euro to Australian dollar exchange rate (EUR-AUD) isThe Australian dollar to US dollar exchange rate (AUD-USD) is(Note: All AUD quotes here refer to the wholesale spot market. Your bank will charge a spread at their discretion when passing on a retail rate. However, an independent FX provider is so well placed on the market that they are able to deliver you up to 5% more currency. Please learn more here.)

The immediate outlook for the Australian dollar is dominated by the RBA February meeting board minutes due for release tomorrow; "they are likely to gain attention following the RBA’s recent shift to a more neutral policy stance in light of growing inflation risks," says a note on the matter issued by Barclays.

Further, Barclays point out that further AUD risk comes as we also get China’s flash manufacturing PMI for February on Thursday.

Regarding the Chinese data consensus is forecasting a small decline to 49.4 from 49.5 in January.

"The market is likely to be particularly sensitive to this release given recent mixed China data and continued uncertainty around Chinese economic growth momentum," say Barclays.

The Australian dollar gapped higher vs the US dollar into resistance at 0.9057, "but rates have since pulled back to fill the gap. The .9057 level remains critical resistance on a longer-term basis, though for today, rates may simply consolidate in the lower-.9000s ahead of the release of the RBA minutes in tomorrow’s Asian session trade," notes Matt Weller at GFT.

Market bias towards AUD remains negative

"Momentum against the U.S. dollar from last week spilled over into today with little restraint given a listless daily economic calendar, and President’s Day holiday celebrations in the U.S. that sapped liquidity," says Ravi Bharadwaj, Senior Pricing and Market Analyst at Western Union.

The market’s bias towards the greenback remains negative and a breakdown of risk-neutral probabilities in FX options suggested further downside risks were caked into short-term expectations by traders.

"The dollar’s blemished aura is no doubt resultant of a string of weaker-than-anticipated U.S. economic reports this year, which in turn was blamed on unusual weather patterns across the world’s largest economy," says Bharadwaj.