Global markets found moderate strength overnight as investors took heed to news the Greek government are likely to respond to calls by the European Union to reign in their growing budget deficit, with the government set to announce as much as EUR4.8 billion in deficit cuts. European economic news saw Euro-Zone Consumer Price Index recorded annual growth of 0.9 percent falling in line with economist expectations. Producer Price index rose 0.7 percent against the expected 0.6 percent growth representing an annual contraction of 1.0 percent. Across the channel saw UK construction activity contracted further in February, with the UK PMI Construction failing to meet estimates recording a level of 48.5 from a previous 48.6. Economist had expected a moderate rise to 48.9.
The US dollar was mostly weaker across the board with dollar index which measures the dollar's value relative to six major foreign currencies fell 0.22 percent to 80.48.
As expected, the Reserve Bank of Australia announced the benchmark interest rates have been increased 25 bps to 4 percent. The communication by Governor Glenn Stevens suggested further adjustments would be likely with the final paragraph of the communication stating Interest rates to most borrowers nonetheless remain lower than average. The Board judges that with growth likely to be close to trend and inflation close to target over the coming year, it is appropriate for interest rates to be closer to average.
Overnight, strength in global equities and key commodities assisted the Aussie dollar to push over the 90 US cents mark. At the time of writing the Aussie dollar is buying 90.3 US cents - we can expect movements to be contingent on Gross domestic product due for release at 11.30 AEDT. Fourth quarter GDP is expected to show 0.9 percent growth from 0.2 percent in the third, to represent annual growth of 2.4 percent.