As anticipated, earnings season remained the primary focus for US investors overnight. Optimism surrounding better-than-forecast earnings helped US stocks cross the line in the black, with the Dow and S&P rose .18 and .07 percent respectively. After a solid round of weakness the greenback was able to find some sun against major counterparts. The Euro also lost ground against the greenback after a solid week of gains as concerns mounted the European bank stress test may unveil further weakness in the banking system. At the time of writing the Euro is buying US$1.2590.

Sterling latest ascent against the greenback was also halted as ratings agency S&P cast double on the UK retaining its AAA credit rating given the nation’s high level of debt. UK GDP rose 0.3 percent in line with expectation to represent an annual contraction 0.2 percent. Sterling slipped back through US$1.50 to lows of US$1.4950 late yesterday however was able to regain some composure to current levels of US$1.520.

Gold slipped back through US$1,200 a troy ounce – the appeal of gold has waned at recent times as the global economic look appears to be decidedly better as market sentiment returns from the doldrums.

After falling to lows just shy of 87 US cents, the Aussie dollar was able to climb back in the US session, assisted by mild strength in US equities. Key local economic data includes the National Australia Bank Business conditions and confidence data. This week will see the fortunes of the Aussie dollar contingent on slew of corporate Q2 earnings released from market US heavy weights such as Alcoa, JPMorgan Chase, Bank of America, Intel and GE. This will ultimately decide where the balance of risk falls and further upward momentum from the Aussie dollar will be reliant on a positive print, given the close correlation with US equities.