Australia: Fair thin trading conditions were felt during the offshore session due to our holiday in Australia; and the period of summer vacation in the US and Europe. US and European equity markets were flat, as investors continue to be concerned about the problems in Greece, the unwinding of QEII in the US and the slowdown of the global economy. Despite the stronger start today, the AUD is likely to be under some pressure in the lead up to the NAB Business Survey, and also the raft of Chinese data which is due for release later this afternoon.

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The NAB survey is the RBA's preferred survey, and will see any result closely watched by the market in a hope to predict the next move by the RBA. The data released out of China will also be closely watched by local investors. The top tier data including industrial production, CPI and retail sales, all for the month of May will provide markets with an indication of how the world's second largest economy is fairing. With the weaker tone on our local currency in the past week, it's likely that the AUD will be most vulnerable to the data out of China.

Close attention will be paid to the industrial production number, and should this come in weaker than the expected 13.1%, it could see the AUD fall through USD1.0500, which as seen as a current key support level.

Majors: Greece once again dominated the news, as Standard and Poor's rating agency reduced their sovereign debt rating to the lowest in the world; cutting it from B to CCC. S&P rate well over 100 countries on their debt and Greece is now the bottom of the list.

While most would think that this would send the EUR falling, it has instead remained fairly resilient as investors are focusing more on the likelihood that the Euro-zone officials will reach a deal to help the nation avoid default. The EUR/USD has remained comfortably above USD1.4400.

This strength has also come from the prediction that should the Euro-zone leaders reach a final agreement about Greece in the near future, the European Central Bank will hike interest rates at their next meeting in July.

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