In a similar pattern, of what has been seen over the last few weeks, the US dollar made modest gains against most G7 counter currencies in the New York morning.  Against the Euro, the greenback gained to trade at 1.3562 while rising to 1.7441 against the British pound.  Dollar strength seems to once again be boosted by market repatriation as the morning’s pop is simultaneously being marked by a Dow Jones that is now down by more than 300 points at just below the 9,000 level.  

Incidentally, making things worse was the monthly report on retail sales.  Consumption in the world’s largest economy fell 1.2 percent for the month of September, the worst in three years.  Completing a three month slump, the Commerce Department report continued to show consumer reluctance in making any purchases now that job loss has accelerated and economic prospects dim.  Making matters worse is the likelihood that stores and manufacturers are likely to see one of the thinnest holiday selling seasons in some time.  This is making the case for a temporary economic downturn smaller by the minute, as figures point to a more extended multi year recession.

Commodities continued to pull back, giving the Australian and New Zealand dollars further weight to drop in the NY session.  Crude futures continued to decline, trading lower by almost $4 a barrel at $75.05 as soft commodities (agriculture) showed nothing but red across the board.  The only glimmer of hope seems to be COMEX gold contracts.  Trading higher by $9.20, contracts per troy ounce were at $848.70.  Although usually tied to the Australian dollar, intuitively giving it a boost, the yellow metal seems to be playing out as a safe hedge rather than speculative tool at this point, decoupling.  Currently, the Kiwi is lower at 0.6184 with the Aussie trading over 200 pips lower from the 0.7073 morning high.

Tags: Australian Dollar, Gold, New Zealand Dollar, US Dollar, US Retail Sales

This entry was posted on Wednesday, October 15th, 2008 at 12:09 pm and is filed under Australian Dollar, British Pound, Currency Trading, Economic Indicators, Euro, US Dollar. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.