A rarity in recent times, overnight movements on the greenback tracked outperforming equity markets, with the US dollar index which measures the value relative to six major foreign currencies rising to highs of 78.14 up 37 pts on the day.
A continuance of this dollar-positive shift in sentiment certainly narrows the window of opportunity for the strength of the local unit, as traders bet on a winding back of economic stimulus in the US, in-turn sooner than expected interest rate hikes. The Aussie dollar parity party's planed by many currency strategists have been taken of the table in the near-term, especially taking into consideration the recent feedback from the Reserve Bank in relation to near term interest rate movements. RBA Deputy Governor Ric Battellino recently stated interest rate levels are now back in the normal range, which of course paints a clear picture on interest rate movements in early 2010.
Overnight, Aussie dollar movements were governed by the broad based US Dollar strength falling to fresh 11 week lows in recent minutes. At the time of writing the Aussie is buying 88 US Cents and remains under pressure ahead of a solid week of economic data in the states.