Australia: The Australian dollar rallied again last night, trading to a new 2 year high of 0.9685, as investors continued to sell the USD.

During yesterday's local session the AUD traded in a very tight range then traded lower early in the European session on Irish and Portuguese bank debt concerns, however the dip was short lived.

The AUD crosses continue to remain firm, with AUD/CAD the star performer trading at "parity" for the first time in 6 years.

Base metals finished higher with copper up 0.5%, nickel up 0.3% and zinc up 0.5%. Gold was also higher again, trading at US$1,309.00 per ounce on the back of a weaker US Dollar.

With no local data of any real significance today, the AUD should be well supported on the back of overnight moves.

Equity markets are expected to trade slightly higher while the market will also be keeping a close eye on moves in the JPY.

Majors: The US equity markets traded higher overnight despite some weaker than expected data releases as investors look ahead.

The US Conference Board's consumer confidence index fell to 48.5 for September - its lowest level in seven months.

The US Case-Shiller house price index came in as expected, down 0.1% for July, to be up 3.2% on the year.

Also released overnight was the US Richmond Fed Manufacturing Index, which fell to -2 for September from +11 in August.

The weak data saw investors continue to sell the US Dollar with speculation that the Fed will have to implement further quantitative easing measures.

As mentioned above, the Sovereign debt concerns spooked markets early in the European session following news that Standard & Poor's might further downgrade Irish bonds, while concerns that Moody's may downgrade Spain's AAA rating added to the nervousness.

Tonight in the US will see the release of the US mortgage applications, while in the UK we await the release of consumer credit.