Australia: The AUD has had a relatively quiet trading session overnight and we're likely to see a similar trading pattern this morning as the local market awaits the release of a wave of Chinese data due out around lunchtime.

Rumors have been circulating that the Chinese data may show signs that the Chinese economy is cooling a little and this would be a negative for commodity driven currencies such as the AUD.

If however, the rumors prove to be incorrect and the data is relatively strong, we could see the AUD bounce back up through USD0.8850 towards USD0.8900.

After it's recent solid gains the AUD is beginning to look a little heavy and the region between 0.8850-0.9000 could prove to be tough going if the AUD is to continue it's way higher.

On the crosses, the AUD has lost a bit of ground, with AUD/JPY opening below JPY 78.00 and AUD/EUR falling back towards EUR0.6900.

Majors: The release of the US Federal Reserve's Open Market Committee minutes were the main focus for offshore markets last night.

The Federal Reserve lowered their economic growth forecast for 2010 to 3.0 to 3.5 percent from the figures they had previously forecast in April of 3.2 to 3.7%.

They noted there had been a relatively modest worsening in the outlook for the US economy, effectively confirming what the market had already realized given the recent string of worse-than-expected data results out of the US.

The release of US Retail Sales figures last night, which fell for the second month in a row, confirmed the perilous state of the US economy.

The USD lost ground against most of the majors as a result of last night's events but investors are cautious about rushing too heavily into some of the other currencies, such as EUR and GBP, given the ongoing problems other parts of the world are also encountering.

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