The overall case for Australian dollar weakness is still in place with a steady interest rate outlook in Australia and a diminishing interest rate spread against the U.S..
Yields were very important in 2005; we think they'll be important again over the early part of 2006. Over the first half of the year we think the dollar will do a little better on interest rates.
This might be a slight dollar negative. The key was the core which was bang on expectations at 0.2 percent. So there's not much inflation there.
The Fed will match or outpace the tightening of Europe or Japan, which should be dollar positive.
Interest-rate support for the Australian dollar will lessen quite substantially as the year progresses. We see a steady outlook from the Reserve Bank of Australia and a higher Fed rate.
The dollar bulls have the upper hand. It increases the chances that they keep on going, and that's what is boosting the dollar.