Australia The AUD continued its relentless push higher overnight, with the next major level of resistance of USD0.9850 now firmly in its sights. It appears that Tuesday's pullback in the AUD, after the RBA's surprise decision to leave official interest rates unchanged, was just a temporary setback and a move towards parity would now seem to be very much a possibility. As US interest rates continue to fall, USD assets are getting sold off as investors look to put their money elsewhere. The outlook for Australian interest rates is a completely different scenario, with the RBA still expected to raise rates again before the end of the year. For investors looking for a solid
return on their funds, and a relatively stable economic environment, there are few other more attractive alternatives than the Australian market at the moment. Of course, sooner or later the AUD will reverse this current trend but in order for this to happen we'll need to see
either some decent signs of improvement in the US economic outlook or a slowdown of growth in China. Local market attention will be focused on the release of jobs data due later this morning. Market expectations are for a 20k increase in the number of employed and for the unemployment rate to remain steady at 5.1%.

Majors The USD was sold off strongly against most of the other majors after a private report from ADP Employment showed that US companies unexpectedly cut 39,000 jobs in September. The market had been looking for an increase of 20,000 jobs. This sent US interest rates sharply lower, with the 10 year bond yield falling to 2.355%, on expectations that the US Federal Reserve will be forced to buy US assets to prop up the US economic recovery. The IMF added to the negative sentiment surrounding the US economic outlook when it revised its forecast for US economic growth this year from 3.3% to 2.6%. They also predict that US growth will slow in 2011 to 2.3%. As a result of the USD sell off, the JPY hit a 15-year high against the Greenback, while the EUR jumped to an 8 month high.