Aussie pummelled on further sub-prime losses!

Market Update 

The Aussie has encountered another wave of risk aversion as investors became jittery over further announcements of large US sub-prime mortgage losses which hit the market on Friday.

In what is becoming reminiscent of the 10 day 10 cent loss on the AUDUSD in mid August this year the local currency has dropped close to 175 pts over the weekend closing the week off with a bang. This volatility has continued this morning with the Aussie tanking a further 70pts since the markets open. Support has been found at 0.9010, though for how long this will hold out is yet to be determined. To give you a little idea about just how volatile the market is at the moment last weeks trading range was in the region of 400pts whilst the Aussie has traded in a 19% range since August.

We expect these conditions to continue this week with a plethora of economic data set to hit the market. Foremost in the domestic market will be the RBA bulletin. This will be widely watched by traders for an indication of future direction of RBA monetary policy. Also hitting traders screens will be Consumer Sentiment and Business Confidence, whilst over the ditch the Kiwi's will see PPI Input/Output data and Retail sales. Conditions overseas will be no different with US Pending Home Sales data, EU GDP, UK Unemployment, US Retail Sales, US PPI/CPI and a Japanese interest rate announcement keeping things ticking along.

Trading Range

0.8950-0.9050