After a brief stint in the sun, the US Dollar resumed its losing streak overnight as global equity markets found strength and Gold threatened to reach all time highs. Overnight Gold rose to highs of US$1059.00 and Crude oil pushed higher to US$73.83.
Another contributing factor to the dollar-negative sentiment came as reports filtered through the market central banks are seeking to drop greenback reserves in an effort to diversify into currencies such as the Euro and Yen. The upside to dollar weakness became evident in Friday's Trade balance figures which showed the US trade deficit unexpectedly dropped 3.6 percent. A reason perhaps for the weak dollar tolerance by the US government as the economy is boosted by a rise in exports. In contrast, recent weeks have seen emphasis by world leaders stressing the need for dollar strength, as a weaker dollar may be detrimental to the recovery of US trading partners by making exports less price competitive for consumers in the US.
The Australian Dollar was the natural beneficiary to commodity strength kick starting momentum to rise well into the high $US.90's again. The NAB's business survey for September will be published at 11.30am today, although not generally a market mover, given low levels of liquidity on the back of holidays in the US, Japan and Canada - a better than expected result could very well push the Aussie through US$.9100 in early trade.
New Zealand retail figures for August outstripped consensus rising 1.1% compared to an expectation of 0.5 percent. The new found resilience of the New Zealand economy really throws interest rate projections off kilter, with traders now balancing leading economic indicators against the RBNZ stance, which suggested earlier last month interest rates will remain at or below the current level of 2.5% until the latter part of 2010.