Australia: The Australian Dollar has opened lower this morning, falling back through USD0.8950 overnight following some disappointing US data releases.

The AUD also underperformed against the crosses, with the AUD/JPY just holding onto 76.00 and the AUD/EUR falling below 0.6960.

The AUD gains have been capped this week as market uncertainty over the global economic recovery have once again re-surfaced.

This was definitely the case overnight when US jobless claims and the Philadelphia Fed index disappointed the market, forcing investors back into the safe currencies such as USD, JPY and CHF.

Gold rose 0.2% to USD1232.3 an ounce, also benefiting from risk aversion flows.

Heading into the Federal Election this weekend, the market is expected to be choppy with this election shaping up to be a cliff hanger.

News poll shows a 50-50 split in voting intentions, the least desirable outcome for the AUD.

Majors: Recession fears in the US, sparked a flight back into safe haven currencies overnight with the USD rallying against the EUR and other higher yielding currencies.

US equity markets were weighed down by disappointing US data, with the Dow Jones Industrial Average dropping 1.39% to 10,271.21 points.

The Philadelphia Fed index fell to -7.7 in August compared with 5.1 in July, economists' expectations had been for a 7.0 reading.

US initial unemployment claims also disappointed, rising 12k to 500k in the week ended Aug 14. It was the highest level since Nov 14, and further stoked fears about the country's already week labor market.

The data has left investors wondering whether further deterioration in the US economy is ahead.

It wasn't all bad news however, UK retail sales were much than better than anticipated, up 1.1%, whilst Germany continued to outperform with the Bundesbank raising its GDP growth forecast for 2010 to 3.0% from 1.9%. There is no major economic data being released offshore tonight.

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