Australia: The AUD has opened up over USD0.8900 this morning after a surprisingly strong night offshore last night.

After a very quiet day yesterday, the AUD look poised to trade within its recent USD0.8750-0.8850 range.

However the release of some strong manufacturing results in the euro-zone and a better performance on the equities side in the US propelled the AUD up to a high of USD0.8952.

Spot gold was higher, boosted by speculation that the Federal Reserve may undertake further policy actions to stimulate the economy and also on a weaker USD.

Crude oil was also higher as equities rallied and also n the back of positive manufacturing results in Europe.

There is no major data due today so the AUD may consolidate its overnight gains and wait for tonight's results of the stress tests of European banks.

Majors: The EUR gained sharply overnight after the release of better than expected euro- zone data and slightly better US housing market data.

The EUR had initially been supported after data showed an unexpected pick up in the manufacturing and the services sectors in the  euro-zone during July.

It was then further supported above $1.2900 after existing home sales in the US fell less than market expectations in June.

The US Conference Board's June index of leading indicators also produced a better than expected number.

US equities climbed broadly following some strong earnings results from Caterpillar, 3M and United Parcel Service.

The Dow Jones Industrial Average rose 201.77 points or 1.99% to 10322.30, marking its biggest one-day gain since July 7 and its highest close since July 15.

As mentioned above the market will now  wait for the results of European bank stress tests tonight to see whether or not they are stringent enough, if they prove not to be, we may see the EUR sold off against the USD.

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