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Risk-off pervades -AUD and NZD diverged.......>

FOREX
FOREX: Risk-off pervades
-AUD and NZD diverged markedly overnight, with AUD the poorest performer in G10
and NZD one of the strongest. This resulted in AUD/NZD touching the lowest
levels since April in early trade, with AUD weakness coming alongside waning
risk appetite and commentary from RBA's Lowe, who stated further concerns over
the credit supply for small businesses in the Australian economy.
-The marked dip in US equities yesterday fed into European trade this morning
and underpinned gains for the CHF and JPY, which sit alongside the NZD as the
strongest performers so far today. USD/JPY touched Y112.32 in European trade,
the lowest levels of the month so far.
-Material data and newsflow have been few and far between Tuesday, with markets
appearing to remain happy to sell EUR/USD rallies, which dragged the pair from
multi-day highs of $1.1310 this morning.
-UK CBI trends data and US housing starts/building permits are due, but focus is
likely to remain on the further gyrations in US equity markets, with US futures
indicating another lower open on Wall Street today.

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