Flight from risk is a grist to the mill of the dollar. - 29.11.2011

US Dollar The Dollar index has been corrected on Monday. The correction has been started with the information of emergency loan for Italy - $ 600 billion prepared by the IMF, that was denied in consequence. But the the fact the markets reacted lively to unconfirmed information suggests that the rapid recovery of the dollar does not have a sufficient foundation, according to investors, and driven solely by risk aversion. Anyway, testing the significant support level 78. 8, the dollar marked a critical point below which the upward movement may be stopped. During Asian trading session the dollar is traded at 79.1 and in case it overcomes the session maximum 79.4 the direct way to 80 is open. Rating agencies keep watching the situation closely. The Fitch agency confirmed the USA rating at AAA, so the forecast was changed into the negative. US Dollar Only negative data have been coming out in Europe lately. So yesterday, the market had information sneaked in, that the largest Japanese investment bank NOMURA reduced Akiva in РIIGS by 75% since the end of September. It also should be recalled that the S & P downgraded the rating of Belgium, before Fitch downgraded it for Portugal, and Moody's for Hungary. In addition, the the euro was strongly pressured by poor results of German and Italian auctions on T-bills, which led to an increase in the 10-year bonds of Italy to record high. These dynamics could ultimately lead to lower ranking or the third in size economy of the region. We all realize if something like that happens to Italy and France, the EUR/USD currency pair may get lower than 1.30. Australian dollar The Aussie was the favorite yesterday. The huge interest of Japanese financiers in the region, as it was shown in the report on capital outflows is reflected in increased investment in Australian economy more than doubled within six months. The interest is primarily due macroeconomic stability (low public debt, stable budget surplus, a relatively high GDP growth, distinct prospects for sector of commodities), which is lacking in the European and American markets. In addition, there are rumors between market participants that the interest in buying Australian currency, in large part due to the fact that SAB Miller buys Australian Fosters for A $ 11. 5 billion. Nonetheless, the deal is not approved at the shareholders meeting scheduled for December 1. Last week the government gave its consent to the transaction, provided that the process of brewing Fosters will continue to be carried out in Australia. We look at the AUD very positive and recommend it to buying. Yesterday, Fitch Ratings increased the (IDR) issuer default rating for Australia on foreign currency debt from "AA +" to "AAA", the highest possible level.