UBS - "We remain wary of sterling - but not only due to the risk of further BoE Gilt buying. UBS Economics notes the cumulative UK deficit so far this year is larger than the corresponding period last year, and that the government will miss its budget targets as a result. Credit rating agencies have already warned that Britain's AAA status is at risk if austerity measures fail to tame the deficit.
The Australian dollar has shown considerable resilience despite ongoing weakness in Chinese economic data, and signs that Australian miners are rethinking their future investment plans. We remain short AUDUSD as a trade recommendation and foresee a gradual decline back below parity with the help of 50bp of RBA easing before year-end."