Australia: Commodity linked currencies were higher across the board as concerns over Japan and Libya eased and US equity markets rallied.

In addition, attention is once again turning to Australia's relatively high interest rate yield advantage and the positive outlook for the local economy.

There is also talk of increased AUD buying from local insurers converting investments back into AUD to fund their Queensland related claims.

We have a number of data releases due later this morning including retail sales, private credit, building approvals and house prices.

Market consensus is for retail sales tohave risen by 0.3% in February, while building approvals are expected to have risen by 4.0% for the same period.

Should the data print on the strong side we may see the AUD head up towards the next key resistance level around USD1.0400.

Majors: The EUR edged higher against the USD overnight after an ECB official spoke about interest hikes in the Euro-zone.

The market has already priced in one interest rate hike from the ECB for April, but the ECB's Bini Smaghi suggested further rate hikes may be needed.

With some US Federal Reserve officials also suggesting the current accommodative stance of the Fed should change, it is somewhat of a tug of war between the USD and EUR, driven largely by the interest rate outlook.

Jobs data out of the US overnight was encouraging. A monthly private sector report showed US employment rose by over 200k thismonth, suggesting this Friday's non-farm payrolls data will also be a solid number.

The USD continues to push higher against the JPY, finding a foothold above JPY83.00. After weakening to an all time low of JPY76.25 during the earthquake crisis, and following the G7 intervention, it now seems the USD is on a steadyclimb higher against the JPY.

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