Australia: The Australian Dollar has opened slightly stronger this morning, supported by the stronger oil price and some positive Australian investment data released yesterday. Capital Expenditure data released on Thursday showed Australian is in the midst of a strong surge in business investment and it is expected to continue to stay strong. The data displayed evidence that the Australian economy continues to stay strong and this supported the AUD. Overnight the AUD traded between USD1.0002 and USD1.0124 as oil traded up around $US100 a barrel. Anti-government clashes in Libya intensified further with rebels controlling much of the eastern part of the country. Libya is the world's 15th largest exporter of crude oil, producing 2% of the eastern part of the country. In the absence of any key data being released today, the market will once again focus on the unrest in Libya and whether Libyan President
Muammar Gaddafi will last the weekend.

Majors: The USD fell broadly Thursday night as traders opted for the safety of the CHF and the JPY amid ongoing turmoil in the Middle East and North Africa. Fears continue to grow that the unrest in the Middle East in going to spread to Iran and Saudi Arabia. There have been protests in recent days in both Saudi Arabia and Iran but nothing approaching the levels we have seen in Libya. If matters were to escalate however the disruption to oil supply could have a major impact global economic growth. Meanwhile, the EUR rallied against the USD on expectations for widening interest rate differentials, pushing it to a three-week high. Market participants are growing increasingly optimistic the ECB will raise interest rates soon to combat rising inflation. Over the past week we have heard from several ECB members who have made hawkish comments about fighting inflation.

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