Australian Dollar Breaks 0.8400 On Commodity Price Gains

[B]Despite a sparse economic calendar, the combination of a pick up in commodity prices and soft US inflation data helped spur a strong Australian dollar rally to break 0.8400 and propel more mild gains for the New Zealand dollar above 0.7500. The Canadian dollar, on the other hand, was not as fortunate. [/B]

Even as oil prices edged back above $68/bbl on concerns that refineries would not be able to meet demand, the currency gradually gave up its gains to push USDCAD back up towards 1.0680 as Canadian bond yields followed US Treasury yields lower. Loonie?s rally could reignite next week, though, with both CPI and retail sales scheduled to be released. If the data signals that inflation remains hot and consumption is keeping pace, USDCAD could go for another test of 1.0600 as traders ante up in anticipation of a July 10th hike by the Bank of Canada.