European markets got the ball rolling overnight on a bearish note as economic recovery fears resurfaced. News that a Government owned company in Dubai have proposed to delay debt payments until May 2010 sent UK and European equity markets into a tail spin, with both the FTSE and DAX losing over 3 percent. With no direction from the states due to the Thanksgiving holiday, the currency markets saw investors return to the perceived 'safety' of the greenback which surged against major counterparts.

Given the lull of confidence in Europe the higher yielding Aussie dollar followed suit, continuing on from the business investment figures yesterday which saw the Aussie retreat from 93 US Cents. The Australian Bureau of Statistics (ABS) released Private Capital Expenditure figures for the third quarter which showed an unexpected drop of 3.9 percent, against the expectation of a 1 percent rise. At the time of writing the Aussie Dollar is buying 91.2 US Cents.

Meanwhile, as the world's other 'safe haven' currency - the Japanese Yen - continues to strengthen against the greenback despite Japanese officials warned of excessive movements in the currency markets may hamper Japans export fuelled recovery. As the Yen makes ground against major counterparts, japans exports become less price-competitive against competing economies fuelling speculation the central bank may need to intervene for the first time since 2004.

Despite the threat of government intervention, the Yen not only continued to strengthen against major counterparts but reached the milestone of a 14 year high against the greenback overnight. The deflationary economic environment in Japan has fuelled speculation another round of stimulus may be called for, in the form of government bond purchases by the Bank of Japan.  Last week saw Deputy Prime Minister Naoto Kan direct additional pressure to the Bank of Japan in relation to the central banks role in combating deflation.

This morning will see a host of economic data from Japan namely Consumer Price Index which is due to be released at 10:30 AEDT and Retail Trade figures to be released at 10:50 AEDT.