Australia: The bullish sentiment surrounding the AUDover recent days took a bit of a hit overnight as investorsmoved to a "risk off" mentality.

Speculation over thepotential economic impact of Tropical Cyclone Yasi,following on so soon from the recent floods, led to a selloff in the local unit.

[Get this delivered to your inbox for FREE. Subscribe to our daily Markets Newsletter.]

Offshore events, mainly related to theEuropean sovereign debt crisis, also added to thenegative tone.

Wells Fargo issued a report overnightcalling for the AUD to pullback toward USD0.9800 in theshort term.

They're basing this prediction on theirexpectation that Australia's economy will slow over thenext few quarters.

Keep an eye on December's trade datadue out later this morning. Expectations are for the surplusto have narrowed to $1.6bio in December.

Buildingapprovals for December will also be released, with themarket looking for a relatively soft figure following theNovember hike in interest rates.

Majors: With the protests in Egypt turning increasinglyviolent, investors retreated to safe haven buying. As aresult the USD strengthened against 11 of 16 major peers.

As Egyptian President Mubarek sought to regain controlhis supporters clashed with anti-government protesters incentral Cairo.

With increased uncertainty in the MiddleEast investors are concerned about the potential impacton the fragile global economic recovery.

The sovereigndebt crisis in Europe continues to drag on. Overnight,ratings agency Standard & Poors cut Ireland's credit ratingfrom A- to A, fuelling the uncertainty over the outlook forrecovery in the European Union.

The EUR was furtherpressured after Germany ruled out allowing the EuropeanFinancial Stability Facility to fund bond buybacks.