Global markets kicked off the first day of the month on a positive note overnight as fears of a financial meltdown in Greece subsided replaced by investor optimism on the back of AIG's deal to sell its Asian life insurance unit and positive economic feedback.
We had a treasure trove of economic data overnight with US Personal spending surpassing consensus to record a rise of 0.5 percent against a previous 0.3 percent whilst Construction Spending improved from the previous month showing a 0.6 percent decline in January.
However, Personal Income data failed to meet estimates with the key measure of total income received by US citizens rising 0.1 percent against the expected 0.4 percent growth. The Personal Consumption Expenditure Deflator which is considered a comprehensive and consistent gauge of inflation in the US, remain unchanged in January representing annual growth of 2.1 percent. Economists had expected the indicator to edge up 0.1 percent. The ISM Manufacturing index also failed to achieve estimates with the index falling 1.9 pts to record a level of 56.5 in February.
The greenback made solid ground against major counterparts with the US Dollar index which measures the dollar's value relative to six major foreign currencies currently trading 0.4 percent higher at 80.75. The CAD was the exception to rule with the Canadian currency getting a leg up against the greenback from a robust GDP result which rose above estimates to record 5 percent annual growth in the fourth quarter.
Despite moderate strength from the US dollar across major counterparts, the Aussie dollar remained well bid in offshore trading as investors weighed in on today's interest rate decision. We also have a solid day of data with the much anticipated Retails Sales and Building Approvals kicking things off at 11.30 AEDT - however the primary driver in domestic trade will be the RBA interest rate decision to be announced at 14.30 AEDT. We can expect a choppy session on the local unit ahead of these key figures as traders look to spot some value out of what appears to be an all but certain rate hike according to the market majority. At the time of writing the Aussie dollar is buying nearing day highs at 90.1 US cents.