In a lightly traded session due to Martin Luther King's day in the States, the greenback fell out of favor once again against major counterparts, with a boost in key commodities keeping global markets buoyant. Crude oil and copper we the prime movers translating to surge in commodity currencies with Aussie and CAD the biggest winners.
Despite fears of an economic meltdown in Greece, the Euro was able to squeeze out some moderate strength against the greenback rising to highs US$1.44. Across the channel saw the UK Rightmove House Price Index gave sterling a boost, with the index showing 0.4 per cent growth for the month of January, representing an annual growth rate of 4.1 per cent, well in advance of the previous months 1.7 per cent.
Locally, yesterday's economic feedback provided little support for the local unit. The TD Securities/ Melbourne Institute monthly inflation report showed the annual growth rate of 2.6 per cent for the month of December against 2.1 per cent growth in November. Despite local inflation data suggesting another rate hike in February is more likely than not, it failed result in any reasonable strength for the Aussie but remains a primary supporting factor. At the time of writing the Aussie dollar is buying 92.6 US cents - we expect moderate equity market gains continue to keep the Aussie well bid.