Aussie Dollar battles sliding stocks, recession fears

The Australian dollar was battling to hold its ground on Tuesday as a late slide in U.S. stocks and persistent concerns of global recession hurt riskier investments
to the benefit of sovereign bonds.

* Australian dollar holding around around $0.6490, having bounced from $0.6350/60 support on Monday to reach as high as $0.6597 before running out of steam.
* Aussie was initially aided by poor economic news from the United States which dragged on the U.S. dollar, but began to tire late in New York session as stocks turned lower once more.
* A New York Fed gauge of manufacturing showed activity in the region fell to a record low, while Citigroup intends to cut up to 50,000 jobs, or 15 percent of its work force.
* The late drop in U.S. equities added to risk aversion and benefited the safe-haven Japanese yen. The Aussie dipped back to 62.55 yen, from a 64.11 peak.
* The same focus on safety boosted bonds, with short-term futures reaching record highs and bill futures almost fully priced for a 100 basis-point rate cuts from the Reserve Bank of Australia (RBA) next month.
* The RBA will release the minutes of its November meeting at 11:30 a.m. (0030 GMT) and may explain why it chose to cut rates by a surprisingly large 75 basis points to 5.25 percent.
* Three-year bond futures firmed 0.035 to 96.245, having touched an all-time high of 96.305 earlier. The 10-year contract added 0.045 points to 95.070.
* Commodities were mostly weaker. Oil lost $1.94 to
$55.10, while the CRB index shed 1.51 percent to 243.84.