The AUD has had a record night again during the offshore session pushing through the previous post-float high which was only seen on Friday night; hitting a new high of USD1.0314.

Australia: It has since retreated back and is currently trading at USD1.0240. Some mixed data out of the US left investors unsure about the economic recovery in the region and saw the USD weaken, which allowed the AUD to continue to gain on positive market sentiment and as investors demand for high risk, high yielding assets such as the AUD continue to grow.

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Even weaker commodity prices did little to dampen the AUD as oil, gold and metals were all softer. As positive news came out of Libya that rebel forces are in control of most of the major oil terminals, concerns over supply saw the price of oil weaken 1.6% at USD103.76/barrel. With a lack of local influential local data due out today, it’s likely that the AUD will continue to track closely with equity markets and prevailing market sentiment.

The only top tier data to be released in Australia this week is Retail Sales for February, which the Australian Bureau of Statistics will announce on Thursday.

Majors: As mentioned above, data out of the US overnight was mixed. US housing spending data unexpectedly surprised on the upside while the Dallas manufacturing index, which in recent times has been very strong, actually posted
results which were below market expectations. With the recent poor housing data out of the US, concerns were mounting on the likelihood of a recovery in the sector. Pending home sales increased 2.1% and while this may indicate some
stabilization, continued improvement in the other housing sector indicators would need to be seen before there is talk of any sustained recovery.

The Dallas Manufacturing index fell 11.5 points compared to an expected increase of 0.9 points; which contradicts positive manufacturing data seen in other regions. The EUR/USD erased most of Monday’s losses as ECB President Trichet said the central bank is on track to raise interest rates in April with the hope that it may make euro assets more attractive than their US counterparts. While the move by the ECB is believed to be an attempt to fight higher commodity prices, many investors are more focused on the benefits of rising interest rates, than on any damage that may come from struggling peripheral European economics.

The EUR/USD has opened just shy of USD1.4100.

Economic Calendar:

US: Consumer Confidence MAR
JPN: Jobless Rate & Retail Trade FEB

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