US Dollar continues recent push over the last 24 hours

The US Dollar has continued its recent push over the last 24 hours due to a number of factors, not least uncertainty about the level of stimulus that may be needed next week by the US Federal Reserve. The uncertainty stems from the latest batch of US economic data which has been above market expectations; firstly, US durable goods came in at 3.3%, 1.3% above expectations, and new home sales rose to 6.6%, 2.4% above expectations and both contributing to the US Dollar's fight back.

The US Dollar has also been helped by the re-emergence of problems in peripheral Europe, not that they had gone away, just that they had dropped off the markets radar temporarily as the market fixated on the possibitily of furhter quantitative easing in the UK and US.

The collapse of Portugal's budget talks yesterday calls into question the stability and existence of the government there, while in Greece, the Prime Minister has threatened to call an early election, while also confirming market speculation that the 2009 Greek budget deficit would again be revised upwards, this time to above 15%.

As we head into Ecofin (the economic and financial affairs council made up of Eurozone's member states) discussions regarding making bailout measures permanent, it re-ignites the whole question of the cost of EU bailouts, who bears the burden and how those countries with sovereign debt problems in the Eurozone engineer any economic recovery.

On the foreign currency exchange markets the Euro hasn't been badly affected by this news as yet, but the markets will now be scrutinising the Q3 GDP figures from all the Euroland states over the coming weeks, with even greater reliance on German and French growth to prop up Euroland.

Overnight, the Kiwi Dollar edged higher after the Reserve Bank of New Zealand kept its official cash rate steady at 3%. It was not the rate decision that sent it higher, it was a comment from RBNZ governor Alan Bollard that "further removal of monetary policy support will be required at some stage". (If would have been easier to day "interest rates will have to go up at some stage").

US economic data is pretty light today with only weekly jobless claims released of note.