Lawrence Villamar

In what proved to be a day of massive selling across global equity and currency markets yesterday the Australian Dollar fell to a six-month low against its US Counterpart, as a survey out of China, Australia’s largest trading partner, showed manufacturing weakened for a third straight month in September.

Investors staged a global flight from risk Thursday that sent the Dow Jones Industrial Average to its worst two-day point drop since November 2008, after a gloomy outlook by the Federal Reserve renewed fears of an economic slowdown.

The Aussie broke sharply lower overnight on the back of the Fed’s statement. From here, a retracement back to 1.0150 would provide the best set-up for new shorts.

The US Federal Reserve Open Market Committee (FOMC) has announced new measures to stimulate the economy. In what is termed a ´´twist´´, the FOMC intends to purchase by the end of June 2012, $400 billion of securities of maturities in a range of 6 years to 30 years and to sell an equal amount of Treasury securities of maturities of 3 years or less.

The Aussie opens sharply lower this morning at 1.0040 after the US Federal Reserve announced further measures to reduce borrowing costs, strengthening the greenback across the board

U.S. stocks dropped as investors questioned the effectiveness of the Federal Reserve's latest unconventional attempt to bolster the faltering U.S. economy.

The Aussie pushed a little higher than we expected yesterday, rising to 1.0300 before reversing at this level. The focus will remain to the downside with major support seen at 1.0150. Don’t forget the FOMC statement at 4.15am as anything can happen around this announcement.

The International Monetary Fund has cut its forecast for global economic growth. The IMF expects growth of 4.0 percent this year, down from its previous forecast of 4.3pct. The Australian economy is tipped to grow 1.8pct this year and 3.3pct in 2012.

The Aussie jumped to an intraday high of 1.0240 following the release yesterday of the Reserve Bank’s September board meeting minutes which revealed a wait-and-see approach and investors trim their expectations of a cut on October 4.

Fears about Greece's debt crisis battered U.S. stocks again Tuesday, with a market rally all but evaporating in the session's final hour following reports that the heavily indebted country's negotiations with international inspectors may drag on and could still fall apart

The US National Association of Home Builders sentiment index eased from +15 to +14 In September, below forecasts for a steady result.

The Australian Dollar opened under pressure yesterday and as ongoing European debt fears hampered Asian equity markets, our local dollar also continued lower.

U.S. stocks fell in volatile trading Monday, snapping a five-day winning streak as another round of worry over Greece's sovereign debt battered the market.

The improvement in risk appetite has seen the Aussie march up into resistance at 1.0400 and this will be a major defining level for the week ahead. A break above 1.0400 will change the short-term mood to bullish and is likely to trigger new longs.

US consumer sentiment rose from 55.7 to 57.8 in September, above forecasts for a result near 56.3.

Following Friday's positive local session as the regions equity markets bounced, the Aussie hit a 5-day high of 1.0397 during late New York trade. Headwinds remain for the currency however.

U.S. stocks rose Friday, posting gains on each day of the week amid hopes that Europe's debt crisis won't spiral out of control. Friday, the Dow Jones Industrial Average gained 75.91 points, or 0.7%, to 11509.09, and finished the week up 4.7%.

The last two days have seen the Aussie bounce strongly from the 1.0200 zone and this shifts the market sentiment to a more neutral tone. Bears will be looking to short around 1.0350 to 1.0370, but a clear above 1.0380 could be seen as a buying opportunity.

US consumer prices rose by a larger than expected 0.4pct in August and by 3.8pct over the year.

The Australian Dollar traded lower for much of yesterday as the Melbourne Institute Survey of Consumer Inflationary Expectations showed virtually no change.

U.S. stocks notched a fourth-straight gain after a pledge by central banks to pump dollars into the European banking system spurred investors to snap up equities.

The AUD/USD remained under pressure yesterday after the poor housing starts number increased the selling. The pair found support at 1.0200 and staged a bounce form that level, but the market is likely to remain focused on the downside. The RBA bulletin, due at 11.30am, will be the major driver today.

US retail sales were unchanged in August, short of forecasts tipping a 0.2pct rise.

Second quarter CPI was revised downwards yesterday after the Australian Bureau of Statistics released an update in their methods for adjusting for seasonal influences.

Stocks surged as investors found reasons for optimism in a barrage of headlines from Europe. The Dow Jones Industrial Average rose 140.88 points, or 1.27%, to 11,246.73, after a day of whippy trading.

The AUD/USD looks to be consolidating at these lower levels and traders are likely to be looking for the opportunity to get short. A move back to 1.3060 will be seen as a chance to get short while a break below 1.0250 will also be seen as sellable.

US export prices rose by 0.5pct in August, above forecasts for a flat result. Import prices fell 0.4pct, compared with forecasts of a 0.8pct drop in prices

The Australian Dollar continues to be subject to rapid swings in investor sentiment, oscillating in a one cent range between 1.0270 and 1.0370.

U.S. stocks notched a second-straight day of gains Tuesday, led by the industrial and technology sectors, even as investors kept a cautious eye on the latest developments regarding Europe's debt woes