Since the federal reserve left rates on hold on September 17, the dollar-bloc currencies have outperformed the euro, yen, and sterling, all three of which are lower against the dollar.  So far this week the New Zealand dollar is the strongest, rising 2.8%, followed by the Australian dollar's 2.1% gain.  The Canadian dollar is up 1%. 

Higher commodity prices, including oil and copper, are lending support.  The EIA's warning that US output will slip through the middle of next year helped lift the November light sweet crude oil futures contract to almost $50.  This is its highest level since late-July.  The New Zealand dollar was aided by a good dairy auction.  Yesterday the RBA signaled no urgency to cut rates. 

The US dollar briefly slipped below CAD1.30 for the first time since mid-August. Support is seen in the CAD1.2950-CAD1.2980 area.  A move back above CAD1.3050-CAD1.3065 would stabilize the technical tone.  The Aussie poked through $0.7200.  Last month's high near $0.7280 is the next target.   Finishing the North American session today below $0.7200 would be disappointing.  The New Zealand dollar has risen nearly four cents since September 23.  The August highs in the $0.6690-$0.6710 area is the next target, but seems too far today, even though the intra-day technicals warn of the risk of new session highs.

Sterling has gained 0.5% today to $1.5310 to test the 20-day moving average.  There are two main forces lifting it.  First, the bulls get excited by news that Anheuser-Busch (BUD) was raising its bid for the UK's SAB Miller (SBMRF) to GBP68 bln. We are typically skeptical of the direct investment boost as corporations can borrow and need not buy the target currency.  However, it seemed to have lifted sentiment before the other force was clear.  That other force was news that despite the softness in the manufacturing PMI, industrial output rose 1.0% in August.  The consensus forecast was a for a 0.3% increase.  The 0.4% slippage in July was pared to only 0.3%.  Manufacturing itself was up 0.5%. The consensus was also for a 0.3% increase.