The entire Asian session of trade has been centred around the Australian Dollar which has come under some intense pressure following the decision by the RBA to leave rates on hold at 3.75%.

The markets have taken this as a net bearish signal, with the accompanying statement adding to the selling pressure in Aussie dollars after the central bank expressed concerns over mortgage rates, China monetary policy tightening, and the escalation in sovereign debt issues. While the RBA did still maintain an upbeat outlook for the local economy with a hawkish tone going forward, the concerns expressed were enough to knock the higher yielding antipodean off its pedestal.

The attractive yields in Australia have made the local currency an outperformer over the past several months, but this could be coming to an end given the more balanced approach in the latest statement from the RBA. Cross rates like Euros to Australian Dollars and Pounds to Australian Dollars have been getting a lot of attention in recent days with many already selling the Australian Dollar against these major currencies, in addition to the very apparent selling that has gone on against the US Dollar exchange rate.

Elsewhere, New Zealand Dollars FinMin English has been on the wires with some relatively upbeat comments. While the FinMin concedes that the economic recovery will be patchy in the near future, his outlook for the local economy is encouraging and he expects the unemployment rate will soon begin to roll over.

Looking ahead, Swiss Franc SECO consumer confidence (-10 expected) kick things off at 6:45GMT, followed by German retail sales (0.9% expected) at 7:00GMT. UK PMI construction (47.0 expected) is then out at 9:30GMT, with Eurozone PPI (0.0% expected) capping things off at 10:00GMT. US equity futures point to a slightly higher open, while commodities are mixed with oil mildly bid and gold marginally offered.

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Bye for Now