Australian Dollar: The Aussie opens sharply lower today at 0.9710 as risk appetite took a nosedive overnight. In the absence of any market-moving economic data, European sovereign debt concerns continued to occupy the minds of investors during local trade on Tuesday. In largely directionless trade throughout the Asian session, the Aussie moved between 0.9850 and resistance at US99 cents. After heading into the European session around 0.9800, the unit moved steadily lower and hit a 4-week low of 0.9707 after news emerged that fighting broke out between North and South Korea. As a result there was a flight to safety with the greenback rallying across the board and gold rising to US$1,376/oz.

We expect a range today of 0.9650 - 0.9770

New Zealand Dollar: The New Zealand Dollar opens sharply lower today against its US counterpart at 0.7586 - a four-week low. The unit struggled during local trade on Tuesday still reeling from the news the previous afternoon when ratings agency Standard and Poor's revised its outlook on New Zealand's foreign currency sovereign credit rating to negative from stable. The kiwi worked its way lower and headed into the European session trading around the US77 cent area before hitting an overnight low of 0.7581 after news emerged that fighting broke out between North and South Korea. As a result there was a flight to safety with the greenback rallying across the board and gold rising to US$1,376/oz. On the cross rates, the kiwi opens lower today against the Australian Dollar at 0.7800.

We expect a range today of 0.7550 - 0.7635

Great British Pound: The pound opens weaker today at 1.5775 as risk aversion once again gripped currency markets prompting buying of the greenback as a haven. European debt concerns and news that fighting broke out between North and South Korea sent the greenback higher across the board and Sterling to a 4-week low of 1.5758. The local economic calendar is relatively light early this week with the exception of tonight's release of 3rd quarter economic growth data which most economists expect to come in around 0.8 per cent. Meanwhile, the pound has moved higher against both the Australian Dollar (1.6230) and the New Zealand Dollar (2.0790).

We expect a range today of 1.6200 - 1.6310

Majors: Risk appetite took another hammering overnight as foreign exchange markets absorb weak economic data, European debt worries, Chinese banks putting the brakes on lending and news that fighting broke out between North and South Korea. The Euro (1.3376) dropped to a two-month low overnight at 1.3360 as German Chancellor Angela Merkel said the 16-nation currency is in an "exceptionally serious" situation after Ireland's request for financial assistance. The greenback and gold (US$1,376/oz) both advanced as investors flocked to safety. Slightly better than expected US growth data (2.5 per cent annual pace) was over-shadowed by a separate report showing existing home sales decreased by 2.2 per cent. The US dollar opens today at 83.12 against the Japanese Yen after hitting a 7-week high overnight of 83.83.

Data releases

AUD: Conference Board leading index, Sep

NZD: No data today

JPY: No data today

GBP: GDP, Q3

EUR: EZ Industrial New Orders, Sep

USD: Durable Goods, Oct; Initial jobless claims, Nov 20.

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