This morning's building approvals release has potential to be a key number for market thinking on RBA monetary policy and the Aussie Dollar. Dwelling construction is one of the key areas where the Australian economy needs to see improvement to replace the forecast decline in mining investment. Economists are typically looking for increased dwelling construction to make up for around 30% of the loss in mining infrastructure development. The improvement in building approvals has been disappointing so far. Expectations this morning are for approvals to be up about 2.8% for September compared to August. This would put them up only 1.2% year on year. The market is counting on low interest rates, improved housing prices, state first home buyer subsidies and rising business confidence to eventually flow through to more building activity. Yesterday the Housing Industry Association reported that new home sales in September were at the highest level for 2 years. Building Approvals are a volatile number. However, markets may be encouraged by a number that is well above expectations this morning.It could indicate that improved confidence and lower interest rates are starting to kick in. This could be a positive for the Aussie. A weaker than expected number would come on the back of recent Aussie Dollar selling and could fuel negative sentiment for the currency with more pressure on the RBA to cut rates again next year.