The momentum swung back in favor of risk currencies overnight as market participants eyed positive manufacturing reports across the globe. Investors were relieved to see Chinese manufacturing still in growth territory with yesterday's PMI outpacing estimates to record an index level of 50.5 in January - Economists' anticipated a dip into contraction.  Official data overnight also showed manufacturing in the heart of the Euro-Zone is also expending with Germany's PMI rising to 51 from a previous 50.9. The UK and U.S followed suit showing manufacturing on both sides of the Atlantic remains positive territory.

Meanwhile, talks between the Greek Government and private sector representation continued, but expectations an imminent deal between the two are high, providing a solid platform for risk sentiment. The Euro pared recent losses and broke the $US1.31 mark once again with measured gains also seen against major counterparts with the exception of the in-form Aussie dollar.

U.S equities recorded solid gains with the DOW and S&P rising 1.0 and 1.2 percent respectively.

The Aussie dollar forged higher with the AUDUSD pair making a break of 107 to meet resistance at 107.4 US cents. Notably the local unit also broke a 15-yr milestone against the Loonie with the AUDCAD pair rising to highs of 107.11 - a high not seen since May 1997.

The domestic session will see the focus shift to local trade data and building approval numbers which we generally consider a mid-tier risk event with a significant deviation from estimates likely to induce a short term shift. We expect long term resistance around the 107.5/6 US cent levels to contain price action in the near-term - these levels may present considerable headwinds for the local unit with short-side positioning and moderate profit taking a likely scenario as the air gets a little thinner.