Markets began the session on the back foot overnight after a debt auction in Spain highlighted the ongoing European debt drama's with a sale of three and six month bills fetching a decidedly greater yield than the previous action in October. In addition, U.S growth data failed to achieve expectations falling to an annual rate of 2 percent, against the expected and previous 2.5 percent growth. 

Nevertheless, markets pared losses after the International Monetary Fund overnight announced measures designed to assist struggling nations to regain economic composure. The IMF will broaden lending power to to address the needs of crisis bystanders - referring to otherwise healthy economies which have come under pressure as a result of the contagion effect from economic crisis such as the current events in the Euro region. 

In essence, it's an effort to ring fence otherwise healthy nations from the threat of contagion, with short term liquidity lines available if the country in question is otherwise sound and qualified by the IMF. The fund also announced changes to the rapid financing mechanism which generally provides quick assistance in times of hardship with a focus on natural disasters. The scope of the funds ability to fund nations will now be broadened to cope with other major unforeseen occurrences.

Across to the United States and the FOMC minutes showed some members considered additional policy accommodation with Chicago Fed President Charles Evans maintaining his call for additional stimulus. Members also discussed providing the market further transparency involving the disclosure of the intrinsic link between economic performance and monetary policy.

The CAD recorded gains after Canadian retail sales surprised to the upside recording 1 percent growth in September, doubling the consensus estimates.

The Aussie traded in a near 100 pip band with gains capped at 99 US cents before settling lower over the latter part of US trade to hit support just above 98 US cents. The day ahead will see the release of construction data due out at 11.30am AEDT. Market participants will no doubt be looking closely at the HSBC flash PMI-Manufacturing for China.

At the time of writing the Aussie dollar is buying 98.4 US cents with support likely to be maintain between 98/98.1 US cents.