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Australian Dollar:  The Australian Dollar trailed lower throughout Asia yesterday as risk aversion grappled the markets. A trade surplus of 1.83 Billion did little to help and despite the figure being higher than the previous month, higher expectations dampened the impact. After opening the week at 1.0440, the Aussie had dipped to 1.0330 by mid –afternoon and it wasn’t long into offshore trade before the 1.0300 level was taken out. Investors are proving very reluctant to buy the Australian Dollar in a time of such economic uncertainty and this showed as the commodity currency trailed to a low of 1.0260. Talk of a Chinese investment bank potentially purchasing Italian bonds has eased short-term jitters and with the markets some-what stabilised this morning the Aussie open higher at 1.0350 with NAB Business confidence due later this morning.
 
New Zealand Dollar:  Ongoing risk aversion has caused the New Zealand Dollar to post further losses against the Greenback, and after opening yesterday just below 82 cents it continues lower throughout the onshore session. Fears of a Greek default continued to run rampant along with speculation Germany may be preparing for such an occasion, and thus by early on in London hours the Kiwi had found support at 0.8120. This morning the pair sit higher, back around 0.8240, as some calm has been instilled by a potential bond purchase by a Chinese investment bank. From here the focus turns domestic for a short while as the nation’s food price index for the month of August is due for release, along with the nation’s quarterly manufacturing sales. On the cross rates, the kiwi is also higher against the Aussie (0.7965) as risk aversion remains.
 
Great British Pound: It appears the Great British Pound has consolidated under the 1.6000 support level provided over the past six months. After breaking through the downside resistance on Friday, ongoing risk aversion yesterday prevented the Pounds from paring any gains. Also seeing the 1.5900 and 1.5800 handles taken out, an eventual low of 1.5780 was reached before some interest in Italian bonds by the Chinese soothed investors. Cable opens this morning at 1.5850 ahead of UK CPI, RPI and Trade Balance figures due for release this evening. Risk aversion caused the Aussie and Kiwi crosses to post some gains, GBP/AUD moved to a high of 1.5400 and GBP/NZD to a high 1.9460. They open this morning at 1.5300 and 1.9220 respectively.
 
Majors: Fears of a Greek default ran rampant yesterday as speculation grew Germany may be preparing for such an occasion. Adding fuel to the fire was talk of a credit downgrade for some of the major French banks and this saw the Euro drop briefly below 1.3500 for the first time since February this year. Making headlines overnight were talks between Italy and a Chinese investment firm to negotiate a potential purchase of Italian bonds and this news provided a sense of relief to the markets. The shared currency recovered all of its opening losses and trades this morning just above Friday’s close at 1.3670. The Japanese Yen has also strengthened off the back of current worries and dipped back below 77.00 against the Greenback to an intraday high of 76.80. With markets momentarily placated by the potential support of China in the European debt saga, the USD/JPY opens at 77.20 and EUR/USD remains at 1.3670.

Data releases
AUD: NAB Business Confidence
NZD: FPI m/m; Manufacturing Sales q/q
JPY: No data due for release
GBP: CPI y/y; RPI y/y; Trade Balance
EUR: French CPI m/m
USD: Import Prices m/m; Federal Budget Balance