Australia. The Australian Dollar has opened this morning in the low 0.9900’ s after touching the mid 0.9800’s on Friday’s night trade after the Chinese central bank raised the loan reserve requirement by another 50 bps to 19%, the fourth rise in the last 2 months in a further attempt to cool inflation and the strong property market in the major cities.

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This decline was short lived, as better news continued to come out of the US, although not meeting some forecasters expectations.

The release of JP Morgan Chase fourth quarter figures, which were 47% higher than a year ago, provided a lift to the wider US equity market with the Dow up 0.5% to 11,787 and the S&P up again by 0.7% to 1293.

Indicative of the more positive mood the VIX index of volatility hit a 3 year low.

The AUD still seems to be caught in a relatively tight range of 0.9800 to just over parity as commodity prices remain firm but the effects of the devastating floods in Queensland and now Victoria on the Australian economy are unknown.

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Majors. There was a huge slew of data out of the US on Friday including retail sales which were up for the 6 month in a row although a bit weaker than expected (0.8%).

Industrial production rose in December by 0.8% while CPI for the month rose by 0.5%.

Core inflation for 2010 stood at 0.8%, the lowest since 1958! Several Federal Reserve Presidents continue to express different views of how long the easy monetary conditions should continue and the eventual effect on inflation.

The EUR had a kick against the USD as inflation rose to 2.2% in the EU and ECB President Trichet said they were prepared to raise interest rates to counter inflationary pressures.

The medium term dampener on the EUR continues due to the ongoing sovereign debt issues.

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