Commodity Currencies: Canadian Dollar Surges to Fresh 29 Year High

The Canadian dollar surged to a fresh 29 year high today after the central bank signaled that an interest rate hike may needed in the near term.

The central bank was widely expected to leave interest rates unchanged at 4.25 percent, which they did on the fear of derailing the economy by pushing USD/CAD closer to parity. However growth has become so substantial that if it does not wane any time soon, the central bank will need to step in and take action. The futures market is now pricing in 2 rate hikes by the end of the year. Tomorrow we are expecting more Canadian data with raw materials and the current account balance due for release. Australian retail sales are scheduled for release this evening. The strength of the labor market should keep consumer spending strong.