Risk aversion remains the dominant theme following negative open in the US stock markets. AUD/JPY continues to lead the way down and dropped 4% or over 240 pips as the Aussie is additionally pressured by fall in gold prices. EUR/JPY dives through 120 level while USD/JPY also takes out 90 level. Commodities are also under some pressure with gold down to as low as 821 while crude oil dropped to as low as 37.92. Dollar, on the other hand, ride on risk aversion and have the dollar index climbs further to 83.33 so far. Economic calendar is nearly empty today. Canadian new housing price index dropped -0.3% in Nov, inline with expectations.

UK Prime Minister Brown said that UK government will announce plans to fund selected industrials to stimulate investments. German government finalized the EUR 50b rescue package today, which include EUR 10b increase in public infrastructure investment and possibly higher benefits for lon-term job seekers and familiars. Speaking as head of Bank for International Settlements, ECB Trichet said that central bankers are expecting the global economy to recover in 2010 and pledged to do whatever is appropriate to reinforce confidence in the markets. Though, Trichet declined to comment on Eurozone Monetary Policy. Markets are expecting another 50bps rate cut from ECB this Thursday but opinions are quite divided for the moment.