Monday's fighting spirit from the dollar bulls was flawed in the overnight Asian session by two pieces of evidence hinting at resurgent regional growth. The impact was to buoy the spirits of higher-yielding currencies and helped drive the euro to its highest point for the year against the dollar. As we speak, the euro is trading at $1.4800 while the dollar also sank back to ¥91.13 against the Japanese yen.

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The summer earnings recovery for companies, while largely built on cost-saving measures, continues to gather momentum amongst investors. Valuations at 20-times earnings continue to tempt rather than repulse investors to equity markets and it is shaping a philosophy of trust or get left behind. The clear message that investors appear to be shaping is that after each step backwards the market takes, it takes two steps forward. Without evidence of earnings-related weakness, increasingly investors trust the market to head higher.

The Manila-based Asian Development Bank appears to be stealing the limelight today after it boosted its forecast for regional economic growth. Its biannual forecast lifted Asian ex-Japanese growth from 3.4% to 3.9% for 2009, while simultaneously reaching forward to predict 2010 growth of 6.4% as economic prosperity returns. This prediction today reversed the recent pullback in Asian currencies versus the dollar and reinvigorated equity traders pursuing higher yields.

A Chinese government report revealed a surge in imports that once again highlights the resurgent pace of demand for industrial metals within the economy. August imports of crude oil were the second highest on record. Coal imports were three-times higher than August 2008 while imports of copper were twice as high as last year. A huge winner here is Australia, which sent boat loads full of coal to China.

Today those commodity and export sensitive units are higher as gold, industrial metals and energy prices move higher. The Canadian dollar today buys 93.31 U.S. cents while the Aussie dollar buys 87.40 cents.

Britain's Prime Minister Gordon Brown addressed reporters ahead of his departure for this week's G20 meeting in Pittsburgh. He told them that the globe has seen merely the tip of the iceberg in terms of the working impact of stimulus measures and that the full impact is yet to be seen. What we want to do is safeguard a recovery from a recession we feared would develop into a recession, said Mr. Brown.

The pound too benefited from the dollar's lack or appeal today and has risen to $1.6345 from $1.62 at Monday's close. Rising asset purchases by the Bank of England have conspired to strain Britain's public debt and have weighed heavily on the pound recently especially at those moments when the recovery appears to be without a motor.

The Federal Reserve Board starts its two-day meeting today and will most likely announce no change in monetary policy on Wednesday afternoon. The policy statement will undoubtedly be scrutinized to see what subtle changes may have been made between meetings. Signs of greater confidence in economic activity will likely conspire to harm the dollar.