Archived IMT (2009.05.13)

Broad dollar weakness is increasingly turning path of least resistance. Global equities do not necessarily have to rally aggressively in order for the dollar to sell off. This supports our previous calls favouring long AUDUSD for the long run. Although Asia failed to push up EURUSD and GBPUSD beyond the key $1.3740 and $1.5380 resistance, the trend remains clearly high. Absent any drastic events adverse to risk appetite, traders will continue weighing on the dollar. All of this is accompanied by broad strength on gold and silver. Also note how yen weakness has not been as pronounced as that in the dollar.