Although no Canadian economic data was released today, the markets were eagerly awaiting the comments from Bank of Canada Governor Dodge. With the CAD at parity with the US dollar, any changes to the central bank?s monetary policy stance could either trigger a sharp recovery in the loonie or further gains.
However instead, Dodge walked a very fine line by saying that interest rates were appropriate but the loonie had strengthened above their assumed trading range and because of that, they need to evaluate its cause. Meanwhile the Australian dollar continued to rally on the back of higher gold prices and optimistic comments from RBA Governor Battelino. The New Zealand dollar did not fare as well ahead of its August trade balance numbers unfortunately. Its 5 day rally ended today.
Written by Kathy Lien, Chief Currency Strategist for DailyFX.com