The Australian dollar, New Zealand dollar, and Canadian dollar all gained on Tuesday thanks to a bounce in crude oil and gold futures, along with a broad decline in the US dollar.
The only release of note was the minutes from the Reserve Bank of Australia’s August meeting, which supported market expectations for 100bps worth of rate cuts within the next 12 months, according to Credit Suisse overnight index swaps, as they said that slowing demand gave them increasing scope “to move towards a less restrictive setting of monetary policy.” However, don’t expect a change in rates anytime soon, since the RBA still judges that inflation risks remain high. Indeed, until consumer price indicators start to fall closet to target in late 2008 or 2009, the central bank is likely to leave rates steady at 7.25 percent. Looking ahead to Wednesday, Canadian retail sales will be released. As I mentioned in my
outlook for the 5 key events this week, wholesale sales tend to be a good leading indicator for the retail figure. Given the stronger-than-expected 2.0 percent reading we saw this morning,
retail sales could be a better than forecasts as well, which should help the Canadian dollar rise on Wednesday.
Commodity Dollars Gain On Oil, Gold - Canadian Dollar Faces Retail Sales
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