It was a mixed night for the Aussie which underperformed against most major counterparts with the exception of the greenback. US weakness persisted as investors considered the latest weekly jobless claims which failed to meet expectations - as a result the local unit made a break through US dollar parity to highs of 100.2 US cents before settling under USD par over the course of trade.

It's been a rocky road for the Aussie in recent times and it doesn't appear to be stabilising any time soon. As the currency markets cohere to a hybrid of different fundamental drivers, this lack of uniform makes for a cloudy outlook for the Aussie dollar. Local drivers also haven't exactly been the rock of times gone by, from floods in QLD and the economic impact thereof - to inflationary pressures as the state attempts to rebuild, there's not a lot of consistency and currency price action is a reflection of this back drop.

In the absence of local economic news we have little to propel the local unit to the highs achieved overnight and we're expecting a flat to a downside bias in domestic trade. Despite the impact of the Queensland's floods seemingly priced in, there's little doubt there is still more to be digested - we believe this will remain a driving factor for the local unit in the days to come. At the time of writing the Aussie is slightly higher around the 99.7 US cents levels.

Euro price action continued to be the star performer overnight as Spain's attempt to raise 3 billion Euros of government debt was met with solid demand. We also saw a change of language from the European Central bank a President Jean-Claude Trichet raised concerns of inflationary pressures, signaling a willingness to raise interest rates should the need arise.

Nevertheless, the ECB kept benchmark rates at 1.0 percent however this slight shift in language was enough to keep the Euro on a north-bound trajectory against that of its major counterparts rising to highs of US$ 1.3385. At the time of writing the Euro is currently buying US$ 1.3345 and has continued its solid run against the Aussie which has now made a convincing break back to the downside through 75 Euro cents.