Market Watch.

The Australian dollar rally has been caused more by US dollar weakness rather than any strength in the Aussie dollar. That can been seen by looking at the cross rates (financial speak for non-US currencies such as the Euro and Japanese Yen) which haven't moved all that much. While the appreciation may be great for those of you planning an overseas trip, the effect on companies isn't so clear cut. No doubt some are cheering while others are jeering. Exporters in particular are likely to feel pain, especially miners, from the appreciation as they lose some of the advantages of a lower dollar. Importers, though, including many retailers, are unlikely to be complaining. Gold has rallied from US$317 at the start of December to US$357 at present, a gain of 13%. Obviously, people are scared of war and are attracted to the shiny metal. But we'd rather follow Phil Fisher's advice and buy stocks when there's a fear of war as opposed to panic selling, as we suggest in this issue's cover story.