The Australian dollar rallied strongly today thanks to solid economic data and record high in gold prices.
In the month of December, Australia reported the strongest construction activity in nearly 2 years. This says a lot given that the Reserve Bank of Australia raised interest rates twice in 2007. The market was originally looking for building approvals to remain unchanged, but instead, they increased by 8.9 percent in the month of November. Tonight we are expecting Australian retail sales. The health of the labor market in November and strength of the housing market suggests firm consumer spending, which should lead to further appreciation in the Australian dollar. The New Zealand and Canadian dollars on the other hand had no economic data to offset the liquidation out of high yielding currencies. The Canadian dollar suffered the most despite a rise in oil prices because BoC Deputy Governor Kennedy warned that downside are growing.