Last week was a fairly light week for Australian economic statistics. The Aussie was untroubled by a -1.3% monthly fall in motor vehicle sales or by the Melbourne Institute's leading index, which at 0% pointed to flat growth. It actually received some help from the Reserve Bank of Australia when the RBA published the minutes of its policy meeting. For a second week the bank held back from its traditional tirade about the Aussie's overvaluation.

However, the Australian dollar's performance was driven mainly by the hopes and fears of investors about slowing growth in China, an exodus from emerging market currencies and continued downward pressure on commodity, energy and equity prices. And there were more fears than hopes. The Aussie lost two thirds of a US cent and fell by two and three quarter cents against sterling.