The Australian, New Zealand and Canadian dollars are stronger across the board despite a drop in commodity prices. With no economic data released other than mixed Australian reports, the primary driver of commodity price strength is risk appetite. The breakouts in the Australian and New Zealand are impressive and judging from the price action, we could see further gains.
USDCAD however is still holding above Tuesday’s low which means that there is a decent chance for a bounce. We have a lot of important Canadian economic data due out over the next 48 hours. Tomorrow we are expecting the current account and raw material prices both of which are directly impacted by the level of the Canadian dollar. We expect these numbers to be weaker which could trigger the bounce in USDCAD. New Zealand has money supply and business confidence due for release. Building permits dropped -4.3 percent, but the change from the prior month should not be significant enough to offset the strong retail sales and PPI numbers that we have seen in the past few weeks.[B][/B]