The Aussie dollar has kicked off the week in solid form with price action near to 1 percent higher over the last 24-hours. Strength from US equities assisted the local unit to maintain its north-bound trajectory overnight with market participants cheering a series of confidence boosting themes.
News that two of Greece's largest banks will merge provided a bit of light in another wise dark economic environment with Alpha Bank and EFG Eurobank Ergasias announcing a EUR 7-billion deal that would then see the two become Greece's largest Bank.
Low volumes may have exacerbated strength from US equities due to interruptions caused from Hurricane Irene. Nevertheless, this was another reason for markets to cheer, given the impact of the hurricane was less than feared. A report on consumer spending in the U.S also assisted markets to maintain a risk-on demeanour which surpassed estimates to record 0.8 percent growth in July.
The Swiss franc was among the biggest losers overnight as investors found little need for the comfort of safety. There's also been some noise in recent weeks the Swiss National Bank may impose a tax for Swiss franc deposits in an effort to stem the currencies appreciation, in turn eroding the currencies appeal. The EURCHF pair is a staggering 18-percent higher after threatening to reach parity against the Euro earlier this month.
The exception to the rule remained the Japanese Yen which continued to tread water below ¥77. After two days of political jousting it appears Finance Minister Yoshihiko Noda will be anointed Japans sixth Prime Minister in five years, inheriting the reigns to the world's most indebted nation. For now, the currency appears hog-tied around the ¥76 handle with even the most optimistic of themes failing to have a sustained effect.
Local economic data today includes building approvals for July which is expected to show a month rise of 2 percent to represent a yearly contraction of 12.4 percent. At the time of writing the Aussie dollar is buying 106.7 US cents. The local remains on a solid platform to continue to strengthen if we should see regional equities carry on strength seen overnight - we expect the downside to be contained at 106 US cents in local trade.