Currencies

It seems the planets are beginning to align once more for those who have had their patience sorely tested – the gold bugs.

Danske Bank suggests conditions remain favourable for the euro against the US dollar and forecasts a move through 1.40 in coming weeks.

The Dow posted a 92 point rally last night as M&A shouldered aside subprime and Merck posted a good result.

The Australian CPI will be out on Wednesday while the RBNZ will make a rate decision on Thursday.

One poor earnings result set off a jittery Wall Street as funds buying returned to gold and China hiked.

The Dow recovered somewhat from an initial 134 point fall last night as bargain hunters offset inevitable Bear Stearns weakness and disappointment from Mr Bernanke.

Weekly musings from your editor. This week the Aussie dollar, Iluka, the greenback but above all the Japanese yen have caught his attention.

Wall Street action was all after the bell this morning as Bear Stearns announced its funds at the centre of the subprime crisis were close to worthless and some poor profit results were posted.

Wednesday night’s CPI result in the US should provide a clue to the next move in gold as the US dollar threatens to truly collapse.

There was a broad market decline on Wall Street overnight leaving the Dow to do its own thing on rumours of a bid for telco Verizon.