Australian and Canadian Dollar Strengthen Ahead of Interest Rate Decisions

The Australian and Canadian dollars have appreciated ahead of their respective interest rate decisions. Their central banks will be the first to announce where they stand on monetary policy.

The Australians have it easy since they don?t say anything when they leave rates unchanged. The Canadians on the other hand have to justify their decision. There is a strong chance that the Bank of Canada will drop their hawkish monetary bias given the global tightening of credit and the potential impact of weaker US growth. GDP in the second quarter was much stronger than expected, but that too is predicted to slow. Meanwhile Australia will be releasing its Q2 GDP report tonight. On a quarter to quarter basis, growth is expected to slow materially.