After recording considerable gains in the ensuing period of yesterday's local jobs data, the Aussie dollar has remained under pressure overnight with early strength tailing off in the latter half of U.S trade. The local unit rose to highs of 101.43 US cents before broad based US dollar strength took hold as U.S equity markets pared gains.

European markets managed to squeeze out gains amid progress by major political parties to form a coalition government and the news Greece will receive the next tranche of bailout funds.  Despite this, markets remain on edge with concerns of Greece's imminent downfall and Spain's banking system dilemma remaining a primary stumbling block.

The day ahead will see a raft of Chinese data to guide the way with CPI and new loan activity to be the main events. In addition traders will be watching closely to release of retail sales, Industrial production, fixed asset investment and PPI for further clues on the health of the world's second largest economy.

Yesterday, official data showed China's trade surplus unexpectedly $US18.42 billion outpacing expectations of $US7.93 billion. Although it showed a significant surplus, the data showed imports grew at a much lower rate than anticipated, with exporting activity also failing to achieve estimates. We saw general short-term weakness across China-contingent currencies with the Aussie dollar grinding lower in the period to follow given the data showed weakening of domestic demand. At the time of writing the Australian dollar is buying 100.6 US cents.