Australia: The AUD has had a strong night during the offshore session, currently trading comfortably above USD0.9100 after better than expected manufacturing data was released in the US and exceptional profit reports from some of Europe's main banks saw risk appetite back on the table.
With the positive tone in the markets, equities followed with the DOW up almost 2% and the S&P 500 rising 2.2%. Commodities were also influential with oil touching USD81.00 yesterday, levels not seen since May.
All of these factors combined have seen our commodity and growth currency strengthen.
This strength could extend further with local retail sales and building approvals data due out this morning and if solid results are posted this could indicate strengthening of our underlying the domestic economy.
Today the RBA will also hold is monthly board meeting and announce its interest rate decision.
The majority of investors are expecting the RBA to keep interest rates on hold for another month, with many believing that this may be the case for the remainder of the year.
Close attention will be paid to the accompanying statement, and whether there is an indication of further tightening.
Majors: Concerns over the economic recovery in the US and a possible double dip recession have eased overnight with all economic and data releases in positive territory.
Data showed that the pace of expansion in the US manufacturing sector slowed in July, but the result still showed that there was growth. The index moved to 55.5 in July which is down from 56.2 in June.
Market expectation was for a decrease to 54.7. Any reading over 50 shows growth in the sector.
Construction spending also posted positive results, albeit a small increase of 0.1% but this was against markets expectations. The increase was mainly driven by federally funded infrastructure projects.
The profit reports released overnight out of Europe relate to BNP Paribas; France's largest lender, and HSBC; Europe's largest bank, with both companies posting strong reports.
BNP reported an unexpected second quarter profit increase of 31% with HSBC's second quarter profit doubling.
The GBP also made the most of the USD weakness hitting its best level in six months as the releases boosted global confidence.