US Dollar Feeling Perky

The USD has been bashed for sometime now on rhetoric from China and concerns about the over extended stimulus and projected deficits. However, in 2009 the monetary base in the US has not grown and treasury auctions have gone off well even if China’s participation has waned. Coming to the end of a summer that has been driven by low volumes on equities, rising commodity prices and speculation of an improved growth prospective in the short-term, the USD could pick up some steam as short USD speculators take a step back and await the arrival of a lot capital to the market in the fall. On a short-term perspective of the AUD which has led the way against the USD we see the pair selling off some to open the week and could find some support at the converging 100hr and 200 hr moving averages as they approach the 50% retracement of this very short-term move from Friday’s rally.

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