US Dollar continued its loss against the New Zealand dollar and Australian Dollar, but gained momentum against the Canadian Dollar, with the kiwi reporting the biggest gain against the greenback.
Although, no data was released for New Zealand, its gain can be attributed to an overall improvement in risk appetite. The Australian dollar on the other hand rallied despite weaker economic data. The trade balance was much wider than expected, led by a sharp drop in exports while construction sector PMI fell into contractionary levels. The Canadian dollar extended its losses as building permits slipped for the fourth consecutive month, marking the worst bout of releases since 1990. This suggests similar weakness in tomorrow’s housing starts report. The once invincible economy, which boasted of remaining strong in spite of its neighbor’s loss, is now under pressure as the US slowdown is slowly spilling into the economy.