The Aussie dollar was flat against the US dollar, trading at $1.0091 this afternoon following selling pressures on Wednesday.

Risky assets were sold after a report from the ECB revealed that its balance sheet had soared to an all-time high after lending financial institutions more money last week. According to the ECB, its balance sheet expanded to a record €2.73 trillion, while lending to euro-region banks surged by €214 billion to €879 billion in the week ended 23 December. The increase suggests that confidence among banks is deteriorating rapidly.

Investors naturally interpreted the news as a bad omen and wasted no time in reducing their exposure to risky assets. Losses in the Aussie were limited however, as an improvement in US housing data revived sentiment.