The Australian Dollar recovered on Tuesday after an early setback. The Aussie was pressured overnight following a sell-off triggered by the surprise news that the central bank passed on another interest rate hike.

The Aussie erased losses against the U.S. Dollar after demand for higher-yielding assets soared, sending commodity and equity prices higher.

Lower Asian and European equity markets overnight triggered a break in the Euro early in the session, but stable U.S. stock markets helped to hold it in a range most of the New York session.

Without any major economic reports to push the markets around, traders have decided to focus on two elements: the start of U.S. earnings season and the European bank stress results.

On Sunday night, the Euro broke through the “Lehman Low” at 1.2319 running stops and encouraging fresh selling in the process as the market dropped to 1.2233. Although there is a slight short-covering rally shortly before the New York session, most traders believe this rally will be used to attract more selling pressure.

U.S. equity markets finished down on Friday and barely avoided a closing price reversal top which would have signaled the start of a possible retracement to the downside. The March E-mini S&P 500 and NASDAQ made new highs for the year while all three indices closed higher for the week. Friday saw the indices spike higher then break lower following a better than expected U.S. Retail Sales Report.