Australia: It's been a mixed night for the AUD, with the local unit initially bought up through USD0.9800 before retreating back to USD0.9790 this morning.

A weak CPI result out of the US overnight has sparked concern the US Federal Reserve may have to resort to even more quantitative easing measures, further weakening the USD and strengthening demand for riskier assets.

The AUD looked at risk of breaking back through USD0.9700 at one stage yesterday on concerns over the economic troubles in Ireland and possible moves by China to reign in increasing inflationary pressures.

However, there appears to be little scope for the AUD to fall significantly in the short to medium term.

We would really need to see a turnaround in the interest rate outlook, either here or in the US, for investors to be tempted to retreat from the relatively high-yielding AUD.

Further bad news out of the Euro-zone may cause some dips in the AUD but it is unlikely to cause a big sell off unless there is a possibility the EUR could collapse.

Majors: The release of the US CPI data for October was the main focus for the markets overnight. With the underlying inflation rate hitting 0.6% - the lowest level since records began in 1957- the Fed's case for further asset purchases appears to have been justified.

With such a low rate of inflation there is now even talk that the Federal Reserve may have to add even more stimulus to the US economy and embark on a QE3 program.

At the moment it seems to be a competition between Europe and the US as to who can put in the worst performance, with the spotlight very much on Ireland and the possibility the Irish may need to request financial aid from the EU.

There is still a real threat that the debt concerns could spread beyond Ireland to both Portugal and Spain.

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