By Chuck Butler

Down Under in the South Pacific, Australia saw a very nice rise in Consumer Confidence of 7.6%. This was tacked on to November's 4.3% gain. The index collapsed this summer, but the recent rate cuts from the Reserve Bank of Australia (RBA) seem to be rounding back into shape.

In New Zealand, Reserve Bank of New Zealand (RBNZ) Gov. Bollard, gave a speech titled "Everyone needs to play their part." In the speech, Bollard, reminded everyone that New Zealand's inflation rate is still very high (5.1%).

Hmmm... Do you think that was that the "wink and nod" that interest rates are not going to go much lower? I think it was. But I guess that depends on whether the rest of the world continues to cut rates so they will unlock the credit crisis! Both of these things could underpin the Aussie and New Zealand dollars at current levels.

And another "Commodity Currency" the Brazilian real really put on the Ritz yesterday with a very strong rally. This is just another sign that the risk takers are dipping their toes again.

All this tells me that the dollar rally, while strong and powerful, could be on its way out in 2009. Now, it probably won’t happen right away. But if risk-takers are already starting to inch back in, then the foreign currencies actually could make a comeback by mid-2009 – and reward any long-term investors who are buying these currencies for a song right now.