Australia: The Australian Dollar has opened fairly unchanged this morning to be trading at USD0.8920 after trading below USD0.8900 late yesterday.

Yesterday afternoon saw the AUD fall to USD0.8860 as speculative positions continued to get long JPY following the comments from the Bank of Japan to keep interest rates low the previous day.

Yesterday, local data continued to be strong, with the Australian Building approvals reporting a rise of 2.3% for July, following a 3.3% decline previously.

Also released was the retail sales data for July, which came in at +0.7%, well ahead of consensus expectations of +0.4%.

The Australian deficit also improved for the June quarter coming in at $-5.6bn. These strong data releases are set to post a good GDP result, which is due out today.

Most analysts are forecasting a rise of 0.9% quarter on quarter, though we expect the number to surprise on the upside and provide a boost for the AUD.

Majors: Overnight in the US the FOMC released their minutes from the August meeting, which revealed the Fed has reinvested principal payments received on MBS (mortgage backed securities) and maturing federal agency debt back into the purchase of US treasury securities.

This continuation of quantitative easing has raised concerns among some Fed members that the Fed is sending an "inappropriate" message to the financial markets of the Fed's ongoing willingness to continue quantitative easing.

The minutes also mentioned that the strength of the US recovery was a concern and the economy was very exposed if a further external shock was to occur.

Other data was mixed overnight with the consumer confidence figures rising unexpectedly from 50.7 to 53.5, the Case-Shiller home price index up by 0.3% in June (yoy up 4.3%) although these were inflated by the home buyer tax credit that has since expired and a drop in the Chicago PMI in July from 62.3 to 56.7.

This data saw virtually no change in the equity markets in both Europe and the US with indices being up or down by a small margin.