Australia: The Australian Dollar has opened weaker this morning trading at 0.9820 after trading to an overnight high of 0.9966. Yesterday’s local data releases saw the Australian AiG PCI Construction for November, which fell further to 42.2 (from 44.0 previously). Also out yesterday was the ABARE Crop Report for December, which is still forecasting the winter crop production of 43.2mt, despite the heavy rain and flooding that has occurred across the country. The RBA’s decision yesterday to leave the official cash rate unchanged at 4.75% was expected and the accompanying statement suggested that they will remain on hold till the at least Q2 2011. An interesting point from the statement was the Board noted higher mortgage rates and lending rates are now ”a little above average” and inflation may be little changed over the next few quarters. Base metals were slightly firmer with copper up 1.3%, nickel up 2.1%, gold eased 0.8% to US$1,405.40. Today will see the release of the Australian Housing Finance data for October, while the AUD is likely to come under a bit more pressure following the sell off during the US session.

Majors: Overnight in the US, the Obama Administration and Congressional Republicans came to an agreement over the extension of the Bush 2001/2003 tax cuts for all for two years in exchange for granting a 13 month extension of unemployment benefits for the long term unemployed. In Europe, Irish Finance Minister Lenihan presented the 2011 Budget, aiming to reduce the Government’s budget deficit to 3% of GDP by 2015. The German factory orders for October reported a rise of 1.6% after the -4.0% in September, while the UK industrial production for October fell 0.2% but the positive was the UK manufacturing rose 0.6%. The US Consumer Credit data for October released overnight reported a rise of $3.4bn, its second monthly rise. Also overnight saw the Bank of Canada keep its official rates unchanged at 1.0% as expected.

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