With continued fears of a double dip recession in the US as well as the contention that China’s property market may be the next bubble to burst, risk was on its back foot today in Asian trade. With the fickle Asian equity markets falling to the red late in the day, the dollar and yen were given a boost as investors fled risky assets. EUR/USD dipped under 1.2580 to post lows for the session after poor ISM data earlier in New York sent the pair to 1.2660 six week highs. With traders selling dollars on the potential of a failing US recovery as well as selling the greenback when risk appetite increases the currency has in essence attained a dual personality as of late.

With caution in the air, the yen crosses slipped in favor of the Japanese yen almost from the get go today. EUR/JPY saw early 110.65 highs dissolve to lows closer to 109.75 as new that a Russian bank had defaulted on almost 200 million Euros worth of bonds due today. Adding even more fuel to the risk adverse fire was a news report that the ECB may yet use quantitative easing as a weapon to battle its frailty. AUD/JPY was near 73.90 lows and GBP/JPY was looking fragile near 131.80 lows as the London session got underway. USD/JPY broke out of its usual range bound trading to drop 75 pips to 87.20 lows on the day.

In the Pacific, the Australian dollar dropped to 0.8460 from 0.8540 and the AUD/NZD touched 1.2230 lows after a start closer to 1.2285 as less dovish than expected commentary out of the RBA helped firm the Aussie dollar, but not in the face of the rampant risk aversion. Spot gold, XAU/USD, was relegated to fresh six week lows near $1186.50 per ounce after China made a statement that the US Treasury market will remain a top priority for the nation; and conversely, gold will not be a major investment vehicle for its reserve currency. The top tier data for tomorrow is from down under, with employment change and rate data due up at 9:30PM (EST). The US has a clean slate set for later with no data releases scheduled.