Overall, the Australian currency offers very little value even if there is a near-term extension towards the 0.95 level.

The Australian dollar has maintained a firm stance over the past 24 hours and held above the 0.94 level against the US currency in local trading on Tuesday with a peak close to the 0.9450 level.

The currency has gained further support from the firm level of commodity prices over the past 24 hours. The potential negative impact from lower stock markets has been measured, especially with European bourses rallying from opening lows, while credit-related risks are still running at reduced levels.

The latest consumer inflation data will be watched very closely on Wednesday with figures for the first quarter and a firm figure would reinforce the possibility of higher interest rates. Nevertheless, the overall risks suggest that there will be a bigger reaction to a weaker than expected inflation number, especially as the economy is liable to weaken over the next few months.