US equities continued to show an upside bias overnight with key indices the DOW and S&P500 finishing the session up 0.23 and 0.34 percent respectively. This buoyant sentiment assisted the local unit to achieve new mile stones with its record breaking run against the Euro and Sterling continuing overnight rising to highs of 76.45 Euro cents and 65.5 Pence with price action currently remains close to these highs.
US 3Q Gross domestic product showed an annual growth rate of 2.6 percent slightly higher than the previous 2.5 percent - Economists had expected a more bullish 2.8 percent YoY growth.
UK GDP came in just shy of expectations recording 0.7 percent growth in the 3Q to represent annual growth of 2.7 percent from a previous 2.8 percent. Sterling began to show signs of life after the Bank of England minutes for the December meeting once again show members were divided on the appropriate course of action for the UK economy. For the third consecutive month the minutes showed division from members with Andrew Posen voting to increase the bond-buying program and Andrew Sentence voting to increase interest rates.
Meanwhile, the Aussie dollar has also taken another swipe at US dollar parity with the local unit rising to overnight highs 100.1 US cents and remains on a firm footing to continue a convincing run above parity. Nevertheless, with little on the cards in the way of catalyst to propel the local unit higher - it wouldn't be unreasonable to expect the Aussie to make a technical retreat in domestic session. From a technical perspective the Aussie has a tendency to meet natural resistance just above US dollar parity and may require the assistance of another buoyant US session to make a convincing break of the US$1 levels. The downside may be met with pockets of short-term support around the 9985 and 9955 levels with resistance just above the overnight highs of 100.1 US cents. We expect local equities to be the key directive for the Aussie dollar in the domestic session - at the time of writing the local unit is exactly on par with the US dollar.