Australia: The Australian Dollar touched 1.0200 onFriday evening before the US non-farm payroll data forJanuary was released. Only 36k jobs were added in thelast month, which was below expectations, but thenumbers were severely affected by winter storms, whichofficials said affected the ability of 886k people to work.

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The unemployment rate fell to 9% from 9.4% as fewerpeople sought work, which spurred a decline in US bondsas yields pushed up signalling that the recovery in theeconomy is accelerating. This helped push up the equitymarkets and the all the major indices finished higher withthe Dow up 0.3% to 12,092 and the S&P 500 up 0.3% to1,311. Gold fell slightly to US$1349 an ounce and oil wasoff to trade below $US90 a barrel but copper hit an all timehigh of US$10,050 a tonne while all other base metalsrose in response to the jobs data.

The AUD remains firmin light of the RBA's comments last week that theAustralian economy will be back to pre-flood activity by themiddle of 2011. Today retail sales for December 2010 willbe released with the market predicting a 0.5% risealthough a few economists predict a softer figure. Anotherindication on the local economy will be jobs ad data forJanuary today followed by consumer sentiment mid weekand the RBA's Governor Stevens on Friday updating theHouse of Representatives on how he sees the economy.

Majors: The EURUSD strengthened and fell below1.3600 on the US payroll data which combined with thecomments from an ECB board member Gonzalez-Paramothat the current increase in inflation is only "temporary"and linked to generally higher commodity prices. Higherinterest rates appear to be further off than they do for theGBP, which may start to raise interest rates later this yearafter better housing data and predicted higher inflation inthe coming months. AUDJPY seems locked in the 82 to83 range with no substantial movement predicted on eitherside.