Australia: The AUD appears to have recovered fromthe steep sell off it suffered after the release of the weaker than expected CPI data earlier in the week.

A number of exporters were keen to take advantage of the dip below USD0.9700, providing support for the local unit and suggesting any further dips may be well supported.

The AUD is also stronger this morning on further USD weakness related to speculation over the US Federal Reserve's quantitative easing measures likely to be announced next week.

With the markets having reviewed their expectations for an interest rate hike from the RBA next week the AUD may struggle to breach the parity level again in the near future.

But with the USD also likely to remain weak, we could see a period of range trading for the AUD in the short term.

In an IMF report released overnight it was stated that the AUD/USD is "mildly overvalued from a medium-term perspective, while recognising that the extent of the overvaluation is uncertain".

Majors: The USD fell for the first time in 3 days after investors went chasing higher returns on speculation the USD will further depreciate when the Federal Reserve buys back more government debt.

Speculation over the likely size of the Fed's QE program is building with some reports that it could be as large as USD2 trillion.

The first steps of the program are expected to be announced after the Fed meeting next week.

US Initial Jobless claims released overnight were a little better than expected coming in at 434k as opposed to the forecast of 455k.

Markets will be keeping a close eye on tonight's US data releases, which include Q3 GDP and consumer confidence data. Market expectations are for a GDP figure of around 2.0% YoY, with any figure different from this likely to cause some volatility.

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