Good Morning,

The close of the domestic session yesterday had the Australian dollar under pressure again like the last few nights as the European session got underway.  European concerns still remain at the forefront of global markets and the Euro came under significantly selling pressure overnight shedding nearly a cent to its low overnight versus the greenback.  We did have German jobless which fell by more than expected at 18,000 which put the jobless rate at 6.7% which helped stem some of the selling.   In a mirror to the previous night it was all about the safety play with the Yen gaining again with the Australian dollar retreating to 84.59 Yen early in the US session. 

Traders were wary of the upcoming data release in the States but as prints came in on target for quarterly GDP at 3% and weekly unemployment claims came in reasonably close to estimates at 359,000 claims and this took the negative bias from trade and gave rise to risk asset recovery.  The Australian dollar was able to recover to where it started the day yesterday back up at around 1.038 but the Euro was only able to recover about half of its losses through the overnight session.

The local and Asian session has a myriad of medium tier out this morning including HIA new homes sales, private sector credit and also Japanese CPI, manufacturing PMI and household spending data so we do expect a bit of volatility.  The European and US session do not have any top tier data (except for Canadian CPI) in play so there should not be a data driven movement to close of the week at least for traders so we are looking for the dollar to trade in the 1.032-1.042 USD range through to the close if we don't get any major market shocks.

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