SYDNEY, Jan 13 (Reuters) - The Australian dollar held above 58.20 U.S. cents on Monday, relinquishing very little of its weekend crusade to a 2 1/2-year high. The Aussie joined the kiwi, euro and other currencies in a rally against the U.S. dollar as investors repositioned for 2003, traders said. Bleak U.S. jobs data converged with investor unease after the United States deployed more troops to the Gulf and North Korea decided to abandon a nuclear non-proliferation treaty. The Aussie traded as high as 58.41 U.S. cents offshore, a level not seen since August 2000. "People often place their bets at the start of the year and both the euro and the Aussie seem to be in favour," said Grant Fitzner, currency strategist at HSBC. At 4.00 p.m. (0500 GMT), the Aussie was trading at $0.5836/41 three percent above last week's low of $0.5666. "The fact that we've been able to hang on up here goes to show the market is very reluctant to sell Aussie. The interest now still is to buy," said Stuart Moore, chief dealer of foreign exchange at St George Bank. The currency was expected to stage an assault on 60 U.S. cents in coming trade. "We see little resistance on the upside until $0.5950," said Sally Auld, strategist at Credit Suisse First Boston.
HIGH-YIELDING Weighing on the big dollar is the United States' record trade deficit of $38 billion set in August. "The sheer size of the inflows required to fund the US dollar external deficit is likely to continue to see the negative U.S. factors dominate in the near term," said Peter Munckton, currency strategist at Commonwealth Bank of Australia. Data showed investors significantly increased Aussie long positions and bought Aussie call options, locking in the right to buy the currency. The Aussie is benefitting as investors chase its interest rate premium of 350 basis points to the United States. "I think they're starting the new year looking at how they're going to increase their returns. At the moment, stocks markets aren't anywhere flash to invest your money so they're looking at the high yielding currencies," said St George's Moore. "When you're in the States and you're looking at (near) one percent interest rates versus (more than) four percent over in Australia, it's four times the return," he said. Speculators in Australian dollar futures ballooned a net long position to 19,339 contracts in the week from Jan. 1 to Jan. 7, from 10,920 contracts in the previous week, data from the Commodity Futures Trading Commission showed. A rally in commodity prices to a five-year high <.CRB> this week has also brightened sentiment for the Aussie. It was firmer on the crosses, fetching 0.5518 euro and 69.47 yen, compared with 0.5484 euro and 69.02 yen late on Friday. The U.S. nonfarm sector shed 101,000 jobs in December. "It's very much a jobless recovery, the most sub-par in the labour market following any recession of the post-war era," said CSFB's Auld.