An improvement in economic data failed to keep US equity markets buoyant as investors focused on some less than convincing corporate earnings. This resulted in another risk fuelled flock to the greenback, which weighed on key commodities magnifying equity market losses. The US dollar index which measures the dollar's value relative to six major foreign currencies is currently trading .53 per cent higher at 79.43.

US Economic news overnight saw the ADP Employment Change show a cut of 22,000 jobs for the month of January against a predicted cut of 30,000. This mildly positive result could be seen as a precursor to Friday's Non-Farm payrolls which is expected to show 10,000 newly created jobs in January. We also saw ISM Non-Manufacturing business conditions index fall short of forecasts, recording a rise 50.5 in January from the negative revision of 49.8 in December.

A similar theme plagued European equity markets which declined despite some moderate economic improvements. German Purchasing Manager index for January rose above estimates with a reading of 52.2, but failed to meet the December's result of 52.7. Euro-Zone PMI also surpassed expectations with a reading of 52.5 but declined from December's reading of 53.6. A PMI reading of 50 and above suggests economic expansion. Euro-Zone retails sales was unchanged for the month of December, against the expected 0.4 per cent growth - however still improved from Novembers contraction of 0.5 per cent to represent an annual contraction of 1.6 per cent.

Across the channel, UK PMI fell short of analysts' estimates recording a level of 54.5 against expectations of 56.6 down from December's result of 56.8.

Locally, weakness in commodity markets have weighed on the Aussie dollar overnight with the local unit currently trading at session lows of 88.1 US cents. We expect movements to be contingent to Retail sales data due for release at 11:30 AEDT which are estimated to show 0.2 growth for the month of December, against a previous surge of 1.4 per cent.