Australia: The Australian Dollar has opened firmer this morning, trading at USD0.8260 following on from yesterday’s lead, as equity markets offshore posted gains. Gains in base metal prices also helped support the AUD, with copper up 1.1%, nickel up 1.5% and aluminium +2.8%. Once again the AUD bounced off the key support area around USD0.8060 –0.8080 yesterday, suggesting we are building a solid base around this area. The AUD has also performed well on the cross rates overnight with AUD/JPY trading around the JPY75.50 level, while AUD/GBP is back over GBP0.5700. Gold is trading at US$1.239 per ounce, while crude oil jumped 1.5% to US$72.53 a barrel. During today’s local session we will have the release of housing finance approvals for April and the release of the W-MI consumer sentiment survey for June.
Majors: US equity markets finished higher overnight with the DOW up 123 points on some positive comments from Fed Chairman Ben Bernanke. The Fed Chairman said in an interview that unemployment is likely to remain high for some time while the economy is improving at a modest pace given the depth of the recession. Bernanke also noted that the Fed would not wait for full employment before beginning to raise rates. Also released yesterday was the US NFIB Small Business Optimism index, which came in better than expected for May, with the report noting that small businesses are seeing slight improvements in credit conditions, capital investments and are starting to hire. Meanwhile in the Euro-zone, markets finished down as debt concerns continued to weigh on the markets. German industrial production for April was released and came in better than expected as the weaker EUR is helping to boost exports. Tonight in the US will see the release of the Fed Beige Book, which is expected to continue to show that the US economy is improving given the recent positive data releases out of the US.