Big Week Ahead for the Canadian and New Zealand Dollars

Of the three commodity producing currencies, the Australian dollar was the market’s biggest focus this past week. Not only were employment numbers released, but currency pair soared to a new 25 year high this morning.

A move above the August 1982 high of 0.9905 would mark a 26 year high for the currency. Next week, the currency market’s focus will shift to the Canadian and New Zealand dollars. The Bank of Canada has a monetary policy decision. Although they are not expected to alter interest rates, watch out for any market moving comments from the BoC Governor. New Zealand on the other hand has retail sales, service sector PMI, and consumer prices due for release. Given the sharp drop in consumer and business confidence, we expect the data to be kiwi bearish. The divergence in economic activity between Australia and New Zealand has driven the exchange rate of AUD/NZD to a new 7 year high.