Gold, Oil Rallies Propel the Commodity Dollars Higher, Canadian CPI Hits 5+ Year High

The Australian Dollar, New Zealand Dollar, and Canadian Dollar all surged higher on Thursday, aided by a weak US dollar, a 4.9 percent jump in oil futures and a 2.8 percent gain in gold futures.

Meanwhile, the headline reading of Canadian CPI accelerated 3.4 percent in July from a year earlier, marking the sharpest gain since March 2003. As usual, the index was led by volatile energy and food costs as the Bank of Canada’s core measure actually held steady at 1.5 percent. Nevertheless, Credit Suisse overnight index swaps have shifted to price in 30bps worth of rate cuts by the Bank of Canada within the next 12 months, compared to over 50bps earlier in the week. Looking toward Friday though, commodity currencies will likely remain contingent upon oil and gold prices, especially since there is no data scheduled to be released.