Surging oil prices could push the Australian dollar through
US80c in the coming months, reports the SMH. But sustained high prices
could also shackle global growth in the longer term, ultimately
acting as a double-edged sword for the currency, according to analysts.

And the rocketing price of diesel fuel (up 40% in two years) is leading to a power
struggle between transport operators and their customers over who
will carry the costs, reports the Smage. So far, the big retailers have absorbed the cost of surging fuel
prices and rising transport expenses in order to
remain competitive, say retailers and economists.

The Fin Review reports that Telstra chief executive Sol Trujillo
has called on some of the country’s biggest fund managers to help block
new regulatory measures being considered by federal cabinet today,
after blaming government regulation for forcing him to impose a hiring
freeze. Trujillo’s hard line stance is good news for investors, says John
Durie in the AFR, but it’s a question of playing the right hand
to achieve the political outcome he wants and many doubt he’s walking
the right line on that score.

Macquarie Bank’s confirmation that it’s considering a bid for the
venerable London Stock Exchange is an indication of the scale of
its ambitions and its insatiable appetite for growth, says Stephen Bartholomeusz in The Smage. Despite
its growing list of assets in Britain, MacBank still has a relatively
low profile in the UK – the LSE bombshell will change that, says Bryan Frith in The Australian. The mere fact that Macquarie can
be seen as a credible bidder for such an icon as the LSE will put it on
the map in Britain and, for that matter, in the US and elsewhere.

Also in the AFR, big increases in royalty revenues to the WA and
Queensland governments flowing from the resources boom have sparked a
fresh row between the states over the distribution of billions of
dollars in GST revenues.

On Wall Street, US stocks closed higher overnight, enjoying some
relief from lower crude oil prices. The Dow Jones closed up 34.07 points at 10,634 – MarketWatch has a full report here.