Australia: The AUD had weakened back towards USD1.0500 yesterday as the market worried that Greece’s debt woes could spread to other European economies. Overnight the AUD initially dipped to an overnight low of USD1.0478 before recovering to around USD1.0550.

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With no major economic data being released today, the AUD is expected to trade within a narrow range until Sunday when Euro-zone finance ministers meet to decide on the next round of emergency loans for Greece. A confidence vote for the Greek cabinet is also expected on Sunday which again will be critical for the market.

Majors: Fears of a Greek default dominated the market Thursday night, sending the EUR lower against most of the major currencies. Mixed data out of the US was overshadowed as Greece moved closer to political chaos and European leaders moved no closer to a long-term debt solution.

US equities ended the session higher in volatile trade while European equities were down on poor sentiment. Slightly better than expected US labour and housing data helped to give the USD a lift; however the Philadelphia Fed index was disappointing as it continued its sharp decline.

Gold was lower, declining 0.1% to USD1529.23, while Oil finished the session slightly higher after the IEA forecast that global crude demand would rise in the third quarter. As mentioned above, the market will be watching any outcomes out of Sunday’s meetings in Europe for direction with pressure likely to continue to weigh down the EUR during overnight trade.

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