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The US Dollar firmed up a bit as traders cover short positions, and higher yielding instruments fell on profit taking. The US$ was a bit firmer Tuesday, pulling up from its recent 14 month lows, as investors unwound short positions and took profits in high-yielding currencies after a sharp drop in stocks and commodities. The VIX indicator .VIX, Wall Street’s favourite barometer of market volatility, jumped 9.16% Monday, highlighting the skittish sentiment on stocks, and other riskier assets like growth linked currencies. The US$, a safe-haven when doubts about a global recovery emerge, traded firm around the 76 mark against a basket of currencies, posting its best daily gain since September Monday, pulling further away from a 14 month low of 74.94 on Oct. 21. Savvy market observers said the heavy short positioning on the US$ had made many investors hesitant to sell the “greenback” despite the economy’s weak fundamentals. Data late last week showed currency speculators increased their bets against the US$ in the week to Oct. 20 with the value of net short positions rising to US$18.65B from US$17.99B the week prior. Read more

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US President Barack Obama Tuesday announced US$3.4B in grants to help build a “smart” electric grid meant to trim utility bills, reduce blackouts and carry power generated by solar and wind energy. It was the largest award made in one day from the US$787B stimulus package approved by Congress. The White House said the award will create tens of thousands of jobs while upgrading the US Electric Grid. The grants, which range from US$400,000 to US$200M, will go to 100 companies, utilities, manufacturers, cities and other partners in 49 states; every state except Alaska. President Obama made the announcement after taking a tour of an array of 90,000 solar panels that line a grassy plain of cow pastures deep in the muggy heart of Florida, apparently more panels than there are people in Arcadia. Read more

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China’s economic growth is likely to speed up this quarter, but the government will stay the course on its fiscal stimulus and loose monetary policy, senior officials said Monday. Despite the emphasis on policy continuity, an unmistakable shift toward greater optimism in China’s official rhetoric has led analysts to conclude that Beijing is thinking about how to start unwinding its ultra-loose pro-growth policies. Restating the thrust of a cabinet statement issued last week, Vice Premier Li Keqiang said the economy had performed better than expected and its recovery was now on solid ground. “The pace of growth is quickening quarter by quarter,” Li told an international tax conference. “China is confident and is capable of achieving its full-year economic targets.” Read more

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Google announced an experimental Labs feature that will peruse a user’s Social networks for search results, following up on last week’s announcement that Google and Twitter had established a partnership. “Today we’re rolling out a new experiment on Google Labs called Google Social Search that helps you find more relevant public content from your broader social circle,” said the company in a blog posting Tuesday. Google users can create a profile and add in links to social networks they want covered, such as Twitter, Facebook, or LinkedIn, as well as Gmail contacts. The search results will then include a scan of those sites for relevant information. The search results will not include private data, “You can find it without Social Search if you really want to. What we’ve done is surface that content together in one single place to make your results more relevant,” Google said. Last week, Microsoft and Google said they would incorporate Twitter posts in Bing and Google.com search results. Microsoft’s Bing search engine started social networking searches last week.

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US car maker General Motors Co. received a US$2.6M federal grant Monday to develop technology that will let the automaker convert waste heat from car engines into electricity, and boost vehicle efficiency. The US Department of Energy grant was one of 37 advanced energy research projects announced Monday. GM will work on the technology at its Technical Center in Warren, about 30 kilometers north of the auto city of Detroit . A US government official said today’s announcement reaffirms that the federal government will be an active partner in providing the seed money needed to launch these technologies forward.

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The United States my lose its AAA rating if it can not control its deficit hike, rating agency Moody’s Investors Service warned on Thursday. Steven Hess, Moody’s lead analyst for the United States, said in a TV interview that the AAA rating of the United States is “not guaranteed.” He said if the US deficit does not drop to a sustainable level in the next three to four years, the US rating will be “in jeopardy.” The US government posted a record deficit of US$1.417T in the FY ended Sept. 30. Stimulus package to combat the severe recession and a series of bailout rescues to banks and automakers have put a heavy burden on government spending. The Obama Administration has predicted that deficits would top US$1T through FY 2011. Currently Moody’s has a stable outlook on the US rating, an indication that there will not be a change in the next 18 months. Read more

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