Australian and New Zealand Dollars Race Higher

The Australian and New Zealand dollars continued to perform extraordinarily well. The Aussie has rallied for the eighth consecutive trading day and is within a whisker of its .8873 July high.

The New Zealand dollar has also finally broken out despite mixed economic data. Business confidence improved, but the current account widened while building permits and money supply grew at a slower pace. Gold and wheat prices remain high which is keeping the commodity currencies bid. Although the Canadian dollar is also stronger, it has been mostly stuck in a range ahead of tomorrow?s GDP, industrial product price and raw material reports. The moves of all three of these currency pairs have become overextended and each pip rise raises the risk of a reversal. However when it comes to the currency market, trends can last far longer than most people would expect. Therefore it is more prudent to wait for a reversal to occur than trying to time one.

Written by Kathy Lien, Chief Currency Strategist of