It's no secret that the last few weeks have not been kind to the US Dollar (USD). Quite frankly, the value of the USD has taken a beating against most of the other major currencies in the forex market, However, the USD has staged the ocassional rally to show some strength and where it will ultimately land is still to be determined.
But, in spite of these rallies, the USD has remained consistently weak against the Australian Dollar (AUD). The AUD has been slowly, but surely, strengthening against the USD since early 2009 and it is currently at levels not seen since mid 2008. The USD has been unsuccessful in daily rallies against the AUD and it is possible that this trend will continue.
The greater question is about the drivers behind this trend. There isn't a great deal of import/export business to speak of between the two countries and tourism, as a whole, is down worldwide. Neither government is an active participant in the Forex market and relations between the two countries are fine. So, you could draw a conclusion that this rise is purely the result of speculators against the USD. Whether that speculation is enough to keep the trend moving will be an interesting question to monitor in the last part of 2009.
