Australia: And while the initial reaction was a positive one, markets have since rescinded as concerns over the likelihood of retaliation attacks grows.

Prior to the announcement, during our local trading session yesterday morning we saw the AUD hit another post float high of USD1.1012.

Movement during the overnight session was little, with fairly thin trading markets as many of the overseas markets were closed for public holidays.

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Today all the eyes of the market will be on the RBA interest rate announcement which will be made at 2pm AEST.

Markets have priced almost a 0% chance that the interest rate will be increased at the meeting; especially considering last week higher than expected March CPI result.

And while the result is a concern for the RBA, the continual strength in the AUD offsets some of the problems associated with the higher inflation.

The AUD has strong support at these levels and unless there are any surprises in the commentary, or mention of the current higher AUD, it's likely that the AUD will remain fairly steady during today's local session.

Majors: US equity markets opened the session stronger; however these effects were short lived. Manufacturing data released overnight last night was positive, beating market expectations.

While the April ISM Index fell from 61.2 to 60.4, the result was better than the markets were expecting, and was welcomed considering the weakness in other PMI surveys of recent times.

Construction spending for March also exceeded expectations rising 1.4%, and should filter through to help increase the Q2 GDP growth in the region.

The EUR/USD has hit USD1.4900, the highest level December 2009 as the market looks to Thursday's European Central Bank meeting.

Interest rate differentials are one of the primary drivers of the EUR strength, with expectations that the US will continue to have their interest rate at record lows for an extended period of time. Concerns over the European sovereign debt crisis also helped the EUR push higher overnight, after the Greek Finance Minister said that he hoped that Greece would have more time to repay its bailout loans.

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