U.S. dollars are seen counted by a forex dealer. The U.S. dollar posted gains overnight
Australia: The Australian dollar fell almost one US cent in overnight trade as the US FOMC minutes showed a rising concern about the risks of more quantitative easing.
The US dollar rallied against all major currencies with the AUD seemingly the hardest hit, falling to a low of 1.0237 overnight.
The prospect of further monetary policy easing here in Australia is in stark contrast to the possibility of the US Federal Reserve unwinding some of its emergency stimulus.
The NZD also drifted lower with the AUD as general sentiment was generally softer. Key support for the AUD is now seen at 1.0230 with a break below that opening up 1.0150.
The currency is expected to remain under pressure, with traders unwilling to go against momentum in the USD for now.
RBA Governor Glenn Stevens is due to appear before the House of Representatives committee tomorrow. If the Governor confirms the RBA is looking at the possibility of easing, further weakness in the AUD is expected.
Domestically today, foreign exchange data for the RBA will be released.
Majors: US equities declined for most of the session due to uncertainty ahead of the FOMC minutes. A division among members over further stimulus measures weighed further on equities with the S&P 500 ending 0.6% lower at 1,521 while the DJIA fell 0.3% to 13,998.
The minutes seemed to show greater confidence in the economy with modest improvements seen, particularly in the housing market.
However, a precondition for the removal of stimulus is a recovery in the labour market; which is far from complete.
The GBP took a dive overnight as the Bank of England meeting minutes signalled there is further stimulus to come dipping to a near two and a half year low against the USD.
Oil prices saw a sharp fall overnight as speculation a hedge fund was forced to liquidate positions weighed. WTI futures fell 2.2% to USD 94.46 per barrel, and Brent also fell 1.6% to USD 115.34 per barrel.
Spot gold was also affected over the hedge fund rumours falling 2.4% to USD 1,567 an ounce.
Commodities were generally stronger with only metals posting declines. Tonight a busy night of data is expected for both the Eurozone and US.
21 FEB AU Jan RBA FX Transactions
CH Feb MNI Flash Business Sentiment Indicator
GE Feb PMI Manufacturing/ Services
US Feb Philiadelphia Fed
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