The Canadian and Australian dollars gave up some of their recent gains as oil and gold prices pulled back sharply, with crude futures finishing the day down 2.5 percent below $129/bbl while gold futures fell 1.9 percent to $907.70/oz.
However, the declines were rather subdued as we saw a market-wide return to risk and carry trades, as evidenced by gains in the DJIA and declines in Treasuries. For what it’s worth, the commodity dollar pairs, including USD/CAD, AUD/USD, and NZD/USD continue to simply consolidate the extreme moves we saw over the course of early May. As a result, there is still potential for breakouts and reversals across the commodity dollars, but with little in the way of event risk in coming days, the consolidation may persist.