One hit wonder, or a sign of things to come in 2008?
Ahead of this week's Fed meeting, the US dollar has been showing some signs of strength.
It eased Friday against the euro, but rose for a third day against the yen, the longest winning streak since October.
The yen in turn eased against currencies from South Africa, Canada and Brazil as the November payroll figures encouraged investors to think that the Fed will only cut its key rate by 0.25%. It edged a touch higher against the Aussie dollar
The Australian dollar settled lower in New York around 87.60 USc, down from 87.74 USc in Sydney on Friday afternoon. It was around 87.80 USc in Australia Friday morning.
Now that's not much of a move but seeing it edged higher in Asian trading earlier on Friday, the small fall is perhaps another sign that not too many in the market are confident about the Aussie's short term direction.
Traders said Japanese finance carry trade investors were back in the market but not much will happen either way until we see what happens with the Fed this week.
Overall the currency ended down over the week. It closed around 88.44 USc in New York the previous week.
There was no real disappointment with the non-move decision of the Reserve Bank and investors seem confident that the interest differential with the US will rise this week as a result of the Fed's cut. But US market yields are on the rise and should be watched closely. European short term rates are still high for the range of one month to three month funds.
Certainly gold sent the wrong signals to its supporters on Friday.
Gold fell the most in a week after a fall in oil prices. Silver also dropped.
US inflation seems under control, despite higher petrol, diesel and fuel oil prices and the lower US dollar.
Crude oil prices have weakened and that has fed through into weaker demand for gold.
February Comex gold fell $US6.90 to $US800.20 on Friday, but still ended up 1.4% ahead over the week.
March silver futures fell 12 USc on Friday to $US14.505 an ounce.
Crude oil futures fell to a low of $US 87.07 a barrel on Friday.
Helping kick gold lower was a feeling the US economy might be a bit stronger and inflation a bit weaker. But these are fleeting feelings that could change in a few hours this week.
Gold is up around 27% this year.
Meanwhile an increase in supplies of distillate-fuel supplies, including heating oil and diesel, hurt oil prices.
Supplies are now above the five year average and the US looks now to be well supplied for winter.
January crude oil fell $US1.95 to $US88.28 a barrel on Nymex Friday afternoon.
The price fell 0.5% in the past week, the second straight weekly decline. But oil prices are now down $US10 a barrel from the peak last month.
In London, January Brent crude fell $US1.54 to $US88.64 a barrel on the ICE Futures Europe exchange.
Meanwhile the US Department of Energy has again reported that US consumption of all oil-based fuels fell, compared to a year ago.
Last week it fell to 1.5% under a year ago, the week before it was down 0.5%.
Higher petrol prices are having an impact, but some analysts wonder if the housing slump is forcing more and more Americans to make savings by cutting back on their driving.
Copper prices rose Friday.
