Australia: The AUD has opened almost one US centhigher today after a volatile session in offshore markets overnight. Mixed US data and escalating tensions in theMiddle East supported the USD at first higher howeverstronger commodity prices and recovery in equity marketssaw the AUD regain ground back towards USD1.0150.

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Spot gold strengthened amid rising concerns about globalinflation and the situation in the Middle East, while silverhit a 31-year high. Crude oil also strengthened onheightened tensions in the Middle East after clashes werereported in Libya and Yemen. In the absence of any localdata today the AUD is expected to hold onto its overnightgains and trade within overnight ranges, with USD1.0150seen as resistance at this stage.

Majors: The USD had a mixed session Thursday nightdespite some broadly stronger US data releasedovernight. The Philadelphia Fed Index for Februarysurprised the market, increasing 35.9 for the month; themarket had only been expecting a reading of 20.9. The USCPI for January rose by 0.4% with higher food and energyprices boosting the headline number. However worriesabout possible confrontation between Israel and Iran, with Iranian warships reported to be on their way to the SuezCanal led some investors to the safe haven CHF,shunning the USD this time around.

The EUR came underpressure as investors worried that Portugal could be thenext of the euro-zone nations to fall after it was reportedthat euro-zone officials were pressuring debt stressedPortugal to seek a bailout. The EUR dipped below$1.3600 on the back of the concerns. Tonight we don'thave much in the way of key data being released onlyretail sales for January in the UK.

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