Commodity Bloc Takes Hit on Risk Aversion

[DailyFx]

The Canadian, Australian and New Zealand dollars all rose modestly through the close of Friday’s session. Initially, the commodity bloc’s association to risk was weighing the group down with the Hang Seng’s plunge threatening another wave of selling. However, when the European and North American bourses came online, it became clear that risk aversion would not act up into the weekend. The Canadian dollar made a notable, yet choppy advance into the weekend. Volatile energy prices helped the currency win hard fraught gains with crude up 1.9 percent and natural gas rising 3.9 percent. However, the commodity link could soon fade into the background, if the credit crunch further seeps into the Canadian economy. This morning Bank of Montreal announced a C$210 million writedown on debt related losses.