Australia: History was made late Friday night in our Financial Markets when the Australian Dollar traded ever so briefly and in very thin conditions, above Parity with the US Dollar, for the first time since the currency was floated in December 1983.

It was reached during European trading after a speech from US Federal Reserve chairman Ben Bernanke regarding further weakness in the US economy.

The AUD last traded at parity with the US Dollar on July 28, 1982, when it was subject to a managed, or "dirty" float. It was floated freely on December 8, 1983.

It has opened lower this morning and is currently below 0.9900. Since Friday at 5pm AEST, the AUD has traded between 0.9863 and 1.004.

At a keynote address in Boston, Mr Bernanke said the Federal Reserve was ready to ramp up extraordinary measures to prime the economy amid sky-high unemployment and the risk of crippling deflation. Mr Bernanke s comments raised already elevated expectations that the Fed is ready to pump billions of dollars into the economy to drag the US out of an economic slump.

The really key issues abound in the US, in relation to unemployment, inflation, and all matters relating to monetary policy. Locally, the markets will watch the Reserve Bank of Australia's (RBA) minutes of its October 5 monetary policy meeting, due to be released tomorrow.

The RBA has been trying it's hardest to not raise rates given the global economic environment and the AUD's strength, but there is a genuine inflation issue and price pressures which need to be contained, and the feeling is rates will have to be raised rates sooner than later.

Today we see the AUD trading between 0.9850 and 0.9950.

Majors: The US Dollar continued to weaken on Friday until Bernanke's speech in which he announced no specific plans for another round of quantitative easing or timing thereof.

He was, as expected, very cautious on the US economic condition and outlook, describing the rate of growth as less vigorous than he would like to see with the risk of deflation as "higher than desirable".

So we have no new news on QEII, and there appears little likelihood of it before the Nov 3 FOMC Meeting.

The US inflation result on Friday night was quite weak and was almost a 50 year low, and clearly unemployment is still a huge issue for the US, hence the need to kick start the US economy.

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