Australia: The AUD has opened slightly lower this morning, after rallying towards USD0.9900 overnight.

Better than expected Chinese manufacturing data (PMI) released early in the European session saw the AUD rally to 0.9900, however better than expected US ISM Manufacturing surprised the market and knocked the AUD off its highs.

The AUD touched a low of USD0.9816 before recovering back towards USD0.9850. Investors are now poised to see if the RBA increases interest rates at its meeting today.

The market is pricing in a 20% chance of a rate hike so a surprise increase could see the AUD reach parity for the second time in less than a month.

If they leave rates unchanged, the AUD is still expected to remain supported as underlying fundamentals remain strong.

Following today's central bank meeting the market will turn its focus to the Federal Reserve meeting where the market is expecting an announcement of another round of quantitative easing.

Enjoy today watching the Melbourne Cup, wherever you may be!

Majors: The USD was sharply higher Monday night, spurred on by optimistic US manufacturing data. ISM manufacturing data in the US surprised on the strong side, improving to 56.9 from 54.4 in September.

The more encouraging economic snapshot saw investors re-think the extent of the Fed's quantitative easing program which is expected to be announced Wednesday.

With the strong economic data that has been released lately, investors may be right in thinking that the Fed is going to make a more data dependant decision.

Beyond the Fed's decision, the market is also looking ahead to other central bank meetings this week, which include the Bank of England, European Central Bank and the Bank of Japan.

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