With U.S equity markets closed for Labor Day, European markets held court overnight with equity markets following negative leads set across Asian trade. It appears we're entering another wave of negativity in the cyclical peaks and troughs of the European debt crises - add to the equation renewed fears the US economy is on the cusp of recession and you've got yourself recipe for steep losses.

Continuing on from losses in the domestic session, the Aussie dollar maintained a downward trajectory to make a break to the downside of 106 US cents to lows of 105.11 US cents. The kiwi was the hardest hit of the commodity bloc currencies which a dropped near to 2 percent in the last 24 hours against the greenback.

To the detriment to the Swiss economy, a decidedly risk-off tone saw safety flows making their way to the franc, with the EURCHF pair falling to lows of 1.1015. The Yen however maintained its tight 50 pip range with price action unable to make a convincing break to the downside of Y76.7 against the US dollar. Gold remained support around the $US1900 a troy ounce levels - once again threatening to post another all time high above $US1913 set on August 23rd.

The day ahead will see the focus turn to the RBA rates decision coming up at 2.30 pm AEST. We expect to see the Governor Stevens and Co keep benchmark rates steady at 4.75 percent, with the ensuing statement to once again highlight extreme levels of economic uncertainty abroad. In a recent testimony to the House of Representatives, RBA governor Glenn Stevens surprised investors with a tone of neutrality suggesting the global economic uncertainty warrants sitting on the sidelines rather than a reduction of benchmark interest rates - as built-in to local money markets.

The Aussie dollar will be highly sensitive to the finer points of the statement, but we're expecting the ensuing statement to be moderately supportive of the local unit. Clearly Stevens remains positive for the longer-term economic prospects but also realistic of the significant risks from turmoil abroad. In short, rates are set to remain on hold and we're unlikely to see anything from the Reserve Bank to suggest the contrary. Earlier this morning will see the release of 2Q current account balance, home loan and investment lending data.