Australia: The Australian dollar hit a 2 year high overnight, falling just short of USD 0.9500 after positive comments from RBA Governor Glenn Stevens yesterday boosted the local currency.

A positive night on US equity markets fuelled the demand for the AUD as investors cautiously moved away from the USD in anticipation for tonight's FOMC meeting.

In a speech yesterday, Glenn Stevens commented about the strength of Australia's economic recovery and also gave a clear indication that we will see further interest rate rises in the not to distant future. Governor Stevens said that "the task ahead is likely to be one of managing a fairly robust upswing.

Part of that task will, clearly, fall to monetary policy" with these comments helping the rally in the AUD. Investors are now pricing in a 30% chance that the official cash rate will be increased to 4.75% at the October RBA board meeting.

Today sees the release of the September board meeting minutes, and while most will be watching it closely, it is not likely to have a large affect on the market.

Majors: Investors will also be looking to tonight's FOMC meeting in the US with the likelihood of quantitative easing weighing on the USD.

While the Fed's policy setting committee it isn't expected to announce any additional programs as the recent data out of the US hasn't been as bad as expected, the mere possibility of it saw investors move out of the USD.

US equities rallied, with the DOW up 1.4% after a $1.7bn takeover announcement by IBM, and also after the NBER declared that the recession in the US was over.

The end of the longest recession since WWII saw confidence return to the markets; this is despite a continued slump in homebuilder confidence.

Last week the JPY was at the forefront of talks after the intervention by Japanese authorities, in a bid to help the local export markets.

While we are yet to see any repeated action, with investors starting to eat into the gain, should we see the USD/JPY fall below 85.00, then we could see further intervention by the Bank of Japan.

The GBP/USD was one of the few currencies to lose ground against the USD with a poor session overnight.

The USD gained 0.5% as the market focused on weak house prices and mortgage lending data, rather than the positive comments from Moody which said that the UK's AAA rating will withstand the continuing economic challenges.