After peaking just shy of US dollar parity overnight, the local unit has come under mild pressure in domestic session with the AUDUSD pair making a break to the downside of 99 US cents. Despite moderate support from local and Asian equity markets, risk currencies have struggled to maintain the momentum seen in offshore trade, with commodity currencies remaining heavy as the local session draws to a close. Broad based support for the Japanese Yen would suggest the risk trade seen on Tuesday has fizzled out, or at the very least taking a breather until European markets open for business. Nevertheless, it's a flip of a coin type atmosphere at the moment, we're just another headline away from another major shift in sentiment.

For those sterling punters, UK's the Times has today reported Bank of England policymaker David Miles may be a step closer to voting for the expansion of the existing quantitative easing measures. Gone are the days of the BoE inflation hawks - a decidedly sluggish economy have seen inflation concerns put on the back-burner with members increasingly moving to the side of long-term quantitative easing fan, Adam Posen. Miles told the Times The case for quantitative easing has become in my mind quite finely balanced, and that wasn't how I saw things. It wasn't quite as closely balanced a decision two or three months back, before we really got the bad news over the summer.

Key economic feedback tonight will see the focus turn to the release of German consumer price data which is expected to show inflation grew at an annual pace of 2.4 percent in September. A move lower than expectations will no doubt fuel further speculation of a near term rate cut - clearly another reason for market participants to hit the Euro with another bout of selling. Money markets are currently pricing in a 77 percent chance of a 50bps cut when the bank meets next week.  

Across the Atlantic, all eyes will be on durable goods orders for August.

At the time of writing the Aussie dollar is buying 98.6 US cents.