After weeks of complacency, the impasse between US politicians over extending the debt ceiling has continued to take its toll on markets this week - with global markets screaming for some kind of resolution in what's appears to be a school yard struggle for power. US equities continued their losing streak with the Dow and S&P falling 0.5 and 0.32 percent respectively. At this point there appears to be little light at the end of tunnel - with supposedly only days until D-day, any republican plan put forward will be meet with resistance at the democrat controlled senate, or vetoed by the President himself.

On a positive note, we did see initial jobless claims sneak below the 400,000 mark overnight, while pending home sales surpassed expectations.

The US dollar found selective strength against major rivals but the theme of greenback weakness prevailed, unable to claw back any significant ground against safe haven counterparts the Yen and Swiss franc. The battle of the fundamentally challenged continued with the Euro easing against the greenback for the second consecutive session.

The Aussie's post-CPI love has dissipated with local rates conjecture taking a back seat to the never-ending debt debacle in the US. The Aussie eased lower overnight but displayed supportive behavior around the $US1.0970 levels, which should contain any further weakness during the domestic session. Any significant upside will need to forge through a barrier around $US1.1070/80 levels. Local economic news will see the release of release of private sector credit data for June. At the time of writing the Aussie dollar is buying $US1.10.