For a brief moment today, the Canadian dollar was stronger than the US dollar as USD/CAD fell to a 31 year low of 0.9937. It has been a great week for not only the loonie, but also the Australian and New Zealand dollars, which have rallied for four days straight.
This strength is due to big moves in the commodity markets and overall US dollar weakness. In the week ahead, the Canadian and New Zealand dollars could take on some action of their own with GDP figures expected from both countries. Growth is predicted to have slowed in New Zealand and accelerated in Canada. Watch out for industrial product and raw materials prices however since the strength of the Canadian dollar could bring down inflationary pressures. Today, we had a big surprise in Canadian retail sales. Yesterday?s jump in wholesale sales led everyone to believe that retail sales would be strong as well, but instead of rising, consumer spending actually dropped by 0.8 percent. Interestingly enough, this only put a minor dent on the CAD?s rally.
Written by Kathy Lien, Chief Currency Strategist of DailyFX.com