The Australian, New Zealand and Canadian dollars are all softer today due to the drop in commodity prices and broad dollar strength.
After hitting a new 23 year high overnight of 0.9034, the Australian dollar gave back all of its gains to end the day below 90 cents. Although economic data was mixed with ANZ job advertisements falling and the AIG Construction PMI index rising, the strength of the Australian economy should be the envy of countries like the US who is still struggling. The same can be said for Canada, despite the currency?s fall today. Employment numbers were exceptionally strong on Friday, paving the way for another rate hike by the Bank of Canada. As for New Zealand, house prices fell for the first time since the beginning of the year last month, but even that has only put a minor dent in the kiwi?s rise. Whether this is a real reversal in the commodity currencies or another blip before further gains is contingent upon oil and gold prices. If they have peaked, so will the Australian, New Zealand and Canadian Dollars.
[B]Written By Kathy Lien, Chief Currency Strategist[/B]