The pound Australian dollar exchange rate is 0.76% lower on the day with 1 GBP = 1.5396 AUD at 10AM in London. The euro Australian dollar exchange rate is 0.766% lower with 1 EUR = 1.3477 AUD. The Australian dollar US dollar exchange rate is 0.897% higher with 1 AUD = 1.0240 USD. Weaker Asian stock markets took the wind of the Australian dollar’s sails in the Asian currency trading session. "Spain’s rating downgrade hurt risk appetite and the aussie’s climb has stalled as a result. Today’s G20 will be discussing, amongst other things, expanded lending capacity by the IMF. In line with the expanded eurozone bailout fund, if the G20 can bolster the IMF’s ‘safety-net,’ this will be very positive for riskier currencies such as the aussie dollar," says a note from currency analysts Richard Driver at CaxtonFx. There was also some mildly encouraging news from the Chinese economy with inflation easing slightly; further rises in inflation increases the pressure on the Chinese central bank to hike interest rates and threaten growth (and thus demand for Australian commodities). The pound sterling is trading at 1.5450 against the Australian dollar, and we may see sterling recoup some ground today. Driver notes that the rally in risk has run out of steam, and sterling may benefit from a bounce against the Australian dollar today. As well as the downgrade to Spanish debt, Standard & Poor’s has also cut the ratings of UBS, Lloyds and RBS, as well as putting BNP Paribas, Barclays, Credit Suisse, Deutsche Bank and Societe Generale on a negative watch. All of this news understandably dampened risk appetite. Elsewhere we note that the the Canadian dollar sold off as a result of a widened trade deficit and declining US stocks. Although better than expected, Canadian data revealed a widened trade deficit, whilst the US trade deficit remained the same as in September. The UK trade deficit actually shrank to its best level in four months. Falls in US stocks also ensured the Canadian dollar lost ground to sterling.

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