Australia. The Australian dollar has opened just under0.9900 this morning after a quiet day of trading on Friday night as all eyes focused on the jump in the EUR versusthe USD as data from Germany was much better thanexpected. All major share indices improved in Europe andthis followed through to the US with the Dow up 0.4% to11,872 mainly on the back from better than expected 4thquarter results form General Electric. NASDAQ buckedthe trend and was off 0.6% as was gold to a new 2 monthlow of US$1343 an ounce. The AUD benefitted slightlyfrom the weakness of the USD but seems to be stuck in arange of 0.9800 to just over parity. On Friday, the effect ofthe floods have been estimated by ABARES (AustralianBureau of Agricultural and Resource Economics andSciences) to be a reduction in agricultural production of500-600m tonnes and lower coal exports of 15m tonneswhich reduces export income by up to $2.5b. Focus forthe next two days will be inflation with today's release ofthe PPI (Producer Price Index) for Q4 which the marketexpects to come in at a figure of 0.5%. Tomorrow the CPIfor Q4 will be announced.

Majors. The EUR moved strongly higher by over 150points against the USD on Friday and today is tradingeasily above the 1.3600 level as the market reacted to theGerman IFO business survey that saw businessconfidence surge to 110.3 from 109.8, the highest levelsince West and East Germany were reunified. Growthforecast for Germany in 2011 increased to 2.3% from1.8%. Although this news grabbed the headlines there arestill many problems plaguing the some Europeaneconomies. Spain is nationalising some of its regionalsavings banks, which will cost between EUR25-50b. Withthe tone of the market firm this news was receivedpositively. The GBP/USD drifted higher to above 1.6000as well but the USD/JPY continues to be locked in a rangeof 82-83.