Over the past week, aside from US dollar weakness, no trend has been as apparent as the one in the Australian dollar. After breaking out of a range last Tuesday, the currency rallied for seven days straight and hasn?t looked back.
The central bank has been very positive about the outlook for the Australian economy as well as the country?s ability to weather the global financial turmoil. Economic data in Australia has also been decent, the labor market remains tight and they are benefiting from the high level of gold prices. This has also helped to take the New Zealand dollar higher despite the fact that New Zealand reported a wider than expected trade deficit last month. The New Zealand dollar will be in play tonight with building permits, current account, money supply and business confidence due for release. The pair is hovering near resistance and tonight?s numbers could trigger a breakout. Meanwhile the Canadian dollar is still hovering around parity with the US dollar. There will be no CAD data until Friday.
Written by Kathy Lien, Chief Currency Strategist of DailyFX.com