Australia: The Australian Dollar has out-performed the other major currencies over the past week, and this continued last night, with the AUD setting a new 2 year high of 0.9450 following rumours that the US Federal Reserve will announce quantitative easing measures as early as November.

While the strength over the past week can be attributed to the weakness in the USD, the AUD has also been supported by some strong local data.

Markets have priced in further rate hikes here in Australia as our economy continues to grow, and while global economic news starts to come in better than expected, investor risk appetite improves and the carry trade starts to come back into play increasing demand for the AUD.

Base metals were also firmer overnight with copper up 0.3%, nickel up 2.2% and gold trading at US$1268.00 per ounce.

Local data released yesterday included the NAB Monthly Business Survey, which showed business confidence rose in August by 9 points to +11, while business conditions were unchanged at +5 for the month.

Today the market will be looking to the Westpac Consumer Confidence data for September as well as dwelling starts for the second quarter to provide direction for the AUD during the local trading session.

Majors: Overnight in the US equity markets finished the session slightly lower, with the Dow down 0.2%, the S&P 500 down 0.15%, while the NASDAQ was up 0.2%.

Positive data released overnight included US Retail Sales, which rose 0.4% for August, better than the market expectation for a 0.3% gain.

Also released overnight was the US Business Inventories, which rose 0.7% in July, better than the average forecast of 0.5%.

However, the positive US data was overshadowed by the rumours that the US Federal Reserve would purchase more US Treasuries, which weighed on the US Dollar.

Meanwhile in the UK, the UK CPI release showed a rise of 0.5% in August, keeping the annual pace at 3.1%.

In Germany the ZEW Survey showed that investor confidence fell from +14 in August to -4.3 in September - well below the +10 many had expected.

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