Bell FX Currency Outlook: The Australian dollar has risen almost a full US cent overnight to open at USD1.0750 this morning, up from USD1.0668 late Thursday.

Australia: The rise came after US economic data showed the number of people applying for unemployment benefits had fallen to its lowest point in four years, while the housing and manufacturing sectors continued to improve.

The Australian labour market also showed signs of improvement yesterday, with the headline employment surging 46.3k in January (seasonally adjusted), driven by a recovery in part-time employment after significant falls in November and December 2011.

Total employment was up 0.4% m/m and 0.3% y/y. Due to the improved employment numbers the unemployment rate fell to 5.1% from 5.2% and perhaps pushing the chance for a potential rate cut further out into 2012.

Majors: Positive momentum in the US labour market has continued with initial jobless claims falling to 348k from 358k last week. They are now running at the lowest level seen since March 2008. US housing also showed tentative signs of recovery with housing start rising to 699k in January.

US equities rallied of the back of the stronger data and positive sentiment with the Dow Jones rising 0.9% to 12898, the S&P 1.0% higher at 1357 and the Nasdaq 1.4% higher at 2958. European equities were slightly lower overnight with headlines early in the session casting doubt over whether EU leaders would agree a Greek bailout package by Monday.

The DAX was down 0.1% at 6752 with the FTSE 100 0.1% lower at 5885. Markets seem to be watching headlines closely and awaiting the EU decision on Greece early next week. Rumours have surfaced the

European governments are considering cutting interest rates on emergency loans to Greece and using contributions from the ECB to close a financing gap in the second bailout programme.

Economic Calendar
17 FEB EU Euro-zone Current Account DEC
UK Retail Sales JAN
US CPI JAN