For the third time in as many months the Aussie dollar broke through the grail of US dollar parity overnight rising to highs of 100.3 US cents spending much of the US session with a foot each side of US dollar par. The local unit's ascent coincided with Euro strength which found its feet as ECB President Jean-Claude Trichet called upon European officials to extend the rescue fund intended to bailout indebted nations should the need arise. The Euro subsequently rose to highs of USD 1.35 before resuming a southbound trajectory over the course of US trade and remains virtually unchanged from the 1.3380/90 levels at 0900 yesterday.
Economic news out of the US saw retail sales data surprised to the upside recording 0.8 per cent growth in November exceeding the 0.6 per cent estimated. The better than expected retail sales result induced a notable rally from the greenback, however the US dollar strength was short lived against the local unit which went on to post session highs. The greenback suffered a bout of short term weakness as the US Federal Reserve kept benchmark interest rates on hold between zero and 25 bps overnight. In the post decision statement the Fed reiterated their intention to leave interest rates at an accommodative setting for an extended period with their commitment to the 600 Billion quantitative easing plans remaining firmly intact. The ensuing minutes after the statement saw a kneejerk sell-off on the greenback, however the decision proved to very much a non-event with a very similar tone see from the previous meeting.
Across the Atlantic, sterling didn't have quite the same luck with cable falling to lows of 1.5738 after earlier rising on the back of inflation data. Consumer prices for November showed the annual rate of UK inflation edged up to 3.3 per cent from a previous 3.2 per cent.
Local economic news today includes new motor vehicles for November, however this I unlikely to translate to any significant movement for the local unit with local equity market movements likely to be the key barometer. At the time of writing the local unit is buying 99.85 US cents.