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Australian Dollar: Heightening risk aversion has sent the Australian Dollar past yearly lows yesterday as a bank holiday in NSW and the ACT kept local activity pretty thin. After gapping lower on this week’s open a feeble attempt at 97 cents was made early on before the downward pressure took hold. Finishing the local session around 0.9630 further uncertainty out of Europe and losses on Equity markets leaves the Aussie opening at lows this morning of 0.9530, its lowest level since September 2010. With the Aussie sitting on a knife’s edge today is full of event risk; the RBA holds its monthly monetary policy meeting this afternoon and this comes after monthly building approvals and our all important monthly trade balance. Support on the downside sits at 0.9400 and resistance is at 0.9600 on the upside.
 
New Zealand Dollar:  The New Zealand Dollar is once again caught in the panic and a heightened sense of risk aversion so soon after its credit downgrade has sent the currency spiralling. With investor focus mostly tuned in overseas the Kiwi actually spent most of Asia yesterday trading cautiously in the 0.7590 – 0.7630 range. The North American session saw most of the action and as US equities took a beating so did commodity currencies. The Kiwi opens this morning on seven-month lows at 0.7520 ahead of NZIER Business Confidence survey results due out this morning. With the Aussie under the same degree of international pressure, the cross-rate remains in choppy side-ways trade a little lower than this time yesterday at 1.2665 (0.7900).
 
Great British Pound: The Great British Pound weakened against the Greenback for the second day running yesterday as predictions surface an unexpected expansion of UK manufacturing is not enough to stave off further economic stimulus from the Bank of England. After reporting a contractionary 49.4 last month, this recent figure of 51.1 indicates the sector once again expanded in the month of September. However ongoing risk aversion and global economic weakness means quantitative easing is not off the cards and Cable moved lower from opening levels of 1.5580 to current levels of 1.5420. Weakness in the commodity currencies means Sterling has gained ground against the Aussie and the Kiwi, opening this morning at 1.6190 and 2.0500 respectively.
 
Majors: With some European nations yet to vote for the expansion of the European Financial Stability Fund (EFSF) and Greece yet to receive its next injection of funds, global markets remain extremely nervous. Risk aversion heightened once again overnight, despite the Japanese Tankan report showing the health of the manufacturing industry to be much better than last month as well as Manufacturing PMI in the US exceeding expectations. Equity markets were hit once more, with the S&P 500 closing at its lowest level in over a year and this sent investors scrambling back to safe-haven assets in droves. The Euro continued its journey south taking out 1.3300 and 1.3200 to reach a low near 1.3170 and the Japanese Yen moved back into the 76 range reaching a high of almost 76.50. Both the President of the ECB and the Chairman of the FED are due to speak tonight and investor’s focus will be keenly tuned to the tone of both speeches.
 
Data releases
AUD: Building Approvals m/m; Trade Balance; RBA Rate Statement
NZD: NZIER Business Confidence
JPY: Monetary Base y/y; Average Cash Earnings y/y
GBP: Halifax HPI m/m; Construction PMI
EUR: PPI m/m
USD: Factory Orders m/m