Safe haven currencies turned bullish yesterday as risk aversion again shadowed over the markets despite good data released from Asia, Europe, and the U.S. Traders strongly believe that markets have run up too much faster than economic fundamentals, and further correction might continue. The VIX Index a barometer of risk aversion which measures stock market volatility and known as Wall's Street's fear gauge, rose 12% to 29.23, the most since July 13. Standard & Poor's 500 Index lost 2.2% and closed below 1,000 psychological support level at 998.04. Dow Jones also fell 2% closing at 9,310.60. Crude Oil fell $1.91 closing at $68.05.

The Aussie fell yesterday pressured by commodity prices drop, and less hawkish statement from Bank of Australia which maintained its key interest rate at 3.00%, sending the Aussie to one week low against the Dollar. Traders were awaiting a signal of rate hike, which was not provided by the central bank. AUS/USD pair was able to recover some of its losses as GDP expanded more than expected by 0.6% for Q2.

The Dollar index gained 0.56 points to 78.74, and expected to continue higher if stocks continued to decline. US ISM manufacturing index rose more than expected to 52.9 in Aug, indicating the manufacturing sector expanded for the first time since 2008, while US pending home sales climbed more than expected by 3.2% in July. Unemployment in Europe rose to 9.5% in July along with expectations, being the highest level since May 1999, while Germany's unemployment unexpectedly declined by 1,000 Jobs where retails sales increased 0.7% MoM. Switzerland's GDP declined a less than expected 0.3% QoQ. UK's manufacturing index came below expectations at 49.7 in Aug. Finally from China, PMI increased 54.0 in Aug giving an opposite outlook of equity market, indicating China's manufacturing expanded at its fastest pace since 16 months.

Focus today will turn on GDP results in Euro Zone and PMI construction from the UK. While the U.S. will release its ADP employment change and FOMC meeting minutes.