Australia: After a very range bound session yesterday, the trend continued offshore with the AUD trading within its recent USD1.0590-USD1.0670 range. Weakness in the USD helped support the AUD above USD1.0650, however, it struggled to make much headway above this level with the market becoming fatigued ahead of the weekend.

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Oil futures fell following weak economic data out of the US, while gold eased slightly, falling 0.2% to USD1493.65 per ounce. With no major economic data being released locally today, we expect another quiet session with the AUD well supported above the USD1.0600 level.

Majors: The USD was weaker Thursday night as poor economic data continue to weigh on the US currency. Thursday’s US data release confirmed once again that the US housing market remains in a depressed state, with existing home sales falling in April, while the Conference Board’s leading economic indicators index also fell, the first time since June 2010. The sour data even caused the USD to give up gains against the JPY on the same day Japan released a much worse than expected GDP number stemming from the March earthquake and tsunami.

The EUR continued to drift higher in the afternoon despite some initial weakness earlier on the session while the GBP clawed back from some recent weakness following the release of some better than expected UK April retail sales and the release of the BoE minutes.

US equity markets rallied for a second night in a row, while the European equity market also performed strongly. The market is expected to have another range bound session tonight with investor’s content to consolidate their positions ahead of the weekend.

Economic Calendar
JP BOJ Target Rate
JP All industrial Activity index
EU Euro-zone Current Account
US Fed Dudley speaks

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