Australia: The AUD has opened slightly firmer today after it was announced the government and the mining industry had reached a deal on the new profits tax late yesterday.

After almost touching USD0.8300 following some weaker than expected retail sales and building approval data, the AUD reversed direction and headed back towards USD0.8400 as news began to filter through about a potential agreement that had been reached between the government and the mining industry on the controversial super profits tax.

The AUD rallied back towards USD0.8480 overnight buoyed by the news and also on the back of a USD sell-off as weaker data results in the US continue to puzzle investors.

The AUD is expected to remain supported on the day as we learn more about the government's deal on the mining tax, however interest will later turn offshore with the release of US non-farm payrolls tonight.

Majors: The USD fell sharply against the EUR and JPY Thursday night after worse than expected US economic data fuelled concerns the US recovery was slowing.

The EUR advanced strongly, gaining more than 2.25% to reach its highest level against the USD in 5 weeks.

Elsewhere the USD fell to its lowest level in seven months against the JPY as investors shunned the USD as a safe haven currency.

As mentioned above the weaker US data was the main catalyst for the overnight sell-off of the USD.

US manufacturing activity data showed a slow down with the Purchasing Managers Index falling from 59.7 in May to 56.2 in June.

Economist had expected the PMI to come in at 59.0. Meanwhile, US pending homes sales fell 30% in May, worse than the 13.0% drop economist had expected.

Also denting the recover was the number of US initial jobless claims, which unexpectedly rose last week, another reminder of the lingering weakness in the US labour market.

Tonight all eyes will be on US Non-farm payrolls for June which is expected to show job losses of 110k for the month.