The Canadian dollar?s rise to parity against the US dollar was one of the biggest stories in the financial markets last week. With no economic data due until Friday, the Canadian dollar is expected to stabilize for most of this week.
Bank of Canada Governor Dodge is scheduled to speak tomorrow. Given the recent strength of the Canadian dollar, the odds are favoring more dovish comments from the central banker. The economy has been stable enough for the BoC to not need to lower interest rates, but any cautionary comments could still be taking negatively by the markets. The Australian and New Zealand dollars continued to advance after the RBA Financial Stability Review found that households and the banking sector face little financial difficulties.
Written by Kathy Lien, Chief Currency Strategist of DailyFX.com