Australia: The AUD has put in a very strong performance over the last 24 hours. The rally initially began yesterday morning ahead of the release of the Q2 GDP number.

The market had been predicting a good result and the AUD was bid up in anticipation of a strong number.

Q2 GDP increased by an impressive 1.2%, the fastest pace in three years, sparking a run in the AUD back up to USD0.9000.

These gains were further extended overnight after positive data releases out of the US and China spurred another round of AUD buying.

Australian trade data, due for release later this morning, may provide another boost to the local unit as the market is expecting another big surplus of over $3.0bio.

Despite all the positive local indicators, the AUD remains very much susceptible to offshore developments and any sharp turn around in global investor confidence could easily send the AUD back down towards the USD0.8700 - 0.8800 region.

Majors: Overnight data from the US showed the Institute for Supply Management's measure of US manufacturing unexpectedly rose for August.

The index rose to 56.3 in August from 55.3 in July, helping to ease some concern about growth prospects for the US economy.

Readings above 50 indicate growth. Higher yielding currencies were back in demand and equity markets rallied strongly. The DJIA was up by 2.5%, the Nasdaq by 3.0% and the Euro Stoxx 50 was up by 3.5%.

Positive Chinese manufacturing data also added to the positive sentiment, with the PMI index rising to 51.7 in August from 51.2 the previous month.

Market attention will now turn towards Friday's payroll numbers in the US. With the US unemployment rate still close to 10%, the Federal Reserve is likely to continue its quantitative easing measures for quite some time yet.