The Commodity Currencies are all significantly weaker against the US dollar today as a result of carry trade liquidation and commodity price retracement.
The Commodity Currencies are all significantly weaker against the US dollar today as a result of carry trade liquidation and commodity price retracement. Economic data is not really to blame because even though New Zealand house prices grew at a slower annualized pace last month, the RBA statement was more hawkish than dovish. The RBA revised down their growth forecasts for the next 2 years but they also revised up their inflation forecasts. Canada did not release any economic data, but the currency still managed to incur its biggest one day slide in three decades. On Friday, we had said that fundamentals, technicals and sentiment all pointed to a reversal but we did not expect the majority of the move to happen in one day. Although we could see further gains, parity will be an exceptionally hard level to break in USDCAD. Australian business confidence is the only piece of data due for release from any these three countries over the next 24 hours. With the Dow closing at its session lows, there could be further losses.
[B]Written By Kathy Lien, Chief Currency Strategist for DailyFx.com[/B]