LAST week’s market jitters over the Dubai World debt debacle certainly sent traders heading towards the perceived safe havens with cable dropping over 400 points in little more than 24 hours. However, as the fall-out of the situation is put into context and renegotiation gets underway, many traders seem happy to start winding up the risk profile once again. Sterling-US dollar has already rallied well over 100 points since the start of the month and IG Index is now quoting a price of $1.65853-$1.65883 on the pair.

The yen continues to appreciate against the sickly dollar, with dollar-yen falling to 15-year lows late last week. The yen may be forming a bottom around the ¥86.70 level and if the dollar stages a recovery and the government and the BoJ do their part, the downtrend in the pair may be reversed, and sharply. ShortsandLongs has a spot price for US dollar-yen of ¥86.63-¥86.67.

From a technical perspective, Australian dollar-US dollar is overdue a medium-term retracement. The US$0.9300-US$0.9350 area is attracting some selling, which is fairly significant given that the current sentiment of the Australian dollar is positioned in overbought territory. For now, the November high of US$0.94 is key resistance. FairFX is quoting a market price of US$0.9235.

But while the Aussie dollar has been rising strongly against the greenback, it has been a real battle for supremacy between the New Zealand dollar and the Australian dollar. Both have gained ground against the buck but neither have led the way over the past year when looking at Aussie dollar-New Zealand dollar. Recently the Aussie has had the upper hand, but resistance around the NZ$1.2900 area could provide a selling opportunity. Capital Spread offers a price of 1.2688-1.2700.