During early European deals on Tuesday, the Australian dollar extended its Asian session's downtrend against other major currencies. The Aussie thus declined to a 15-day low against the New Zealand dollar and a 4-day low versus the euro.

The Aussie plunged today as business confidence in Australia fell to a record low in January. According to the survey results published today by National Australia Bank, business confidence index declined 12 points for January to a reading of minus-32, the lowest since the bank began the survey in 1989. In December, the Business Confidence Index improved to minus-20, following the November reading of minus-30.

Australian firms are expected to face exceptionally challenging economic conditions in 2009, the latest Dun & Bradstreet (D&B) business expectations survey revealed today. "Australian firms have had a difficult start to the New Year and ****utives are anticipating the quarter ahead will be the most challenging yet," D&B said.

Meanwhile, the Reserve Bank of Australia Governor said today that the global financial crisis boils down to a combination of extreme borrowing and optimism.

He noted the financial system is characterised by cycles of optimism and pessimism, but the scale of the latest crisis is new.

Mr Stevens says central banks now face the challenge of creating policy that can handle the complexity of the financial system.

Against the US dollar, the Australian currency traded down during early deals on Tuesday. At 4:10 am ET, the aussie-dollar pair slipped to 0.6635, compared to 0.6788 hit late New York Monday. The pair is currently trading at 0.6650 with 0.64 seen as the next target level.

U.S. President Barack Obama is demanding an economic stimulus bill on his desk before Congress leaves for the Presidents' Day holiday on February 16. The U.S. legislation passed a key test in the Senate earlier today with a 61-36 vote to end delaying-tactics by conservative Republicans that had pushed debate into a seventh day. This has set the stage for a final vote, which would send the package into a House-Senate conference to resolve significant differences between the chambers' respective bills.

Treasury Secretary Timothy Geithner also plans to outline rules today for $350 billion in bailout funds designed to help the financial industry as well as homeowners facing foreclosure.

The Australian dollar that closed Monday's North American session at 1.9168 against the European currency touched a 4-day low of 1.9466 at 4:50 am ET Tuesday. The next downside target level for the Aussie is seen around 1.962.

Italy's unadjusted industrial production dropped 12.2% year-on-year in December, after falling 12.7% in November, the ISTAT said Tuesday. The decline was severe than the expected fall of 11.3%. Production dropped for the eighth straight month.

French industrial production declined 1.8% month-on-month in December, slower than November's revised 2.8% fall, the statistical office INSEE said Tuesday. The decline in December matched economists' expectations.

Against the Japanese yen, the Australian currency showed weakness during Tuesday's early deals. At 4:20 am ET, the aussie-yen pair dropped to 60.39, compared to Monday's closing value of 62.10. If the pair falls further, 59.4 is seen as the next target level.

Japanese household consumer confidence rose to 26.4 in January from 26.2 in December, a monthly survey from Cabinet Office showed today. Economists had expected the indicator to fall to 25.2 in January.

The Australian dollar edged down to 1.2436 against its New Zealand counterpart at 4:10 am ET Tuesday. This set a 15-day low for the pair.

The next downside target level for the aussie-kiwi pair is seen around 1.229. The pair closed Monday's New York deals at 1.2615.

Against the Canadian dollar, the Aussie hit a low of 0.8167 at 4:10 am ET Tuesday. The aussie-loonie pair that closed yesterday's late New York trading at 0.8265 is now worth 0.8199. On the downside, 0.807 is seen as the next support level for the pair.

Turning to the US, all eyes will be on Treasury Secretary Timothy Geithner's announcement of plans for the remaining $350 billion left in the U.S. Troubled Asset Relief Program (TARP).

Also, New York Federal Reserve President William Dudley will speak on inflation at 9:30 am ET.

The Commerce Department is due to release its wholesale inventories report at 10 am ET. Economists expect wholesale inventories at the end of December to show a 0.6% decline.

In the afternoon, the US Federal Reserve Chairman Ben Bernanke will testify in front of the House Financial Services Committee.

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