Commodity Currencies Slip After RBNZ Op-Ed Article

The Australian, New Zealand and Canadian dollars have all sold off significantly despite the rebound in commodity prices.

Economic data was weaker than expected overnight, but much of the fall was related to fear of further intervention from the Reserve Bank of New Zealand. The RBNZ issued an opinion article on their website indicating intervention is “an ongoing process.” Although intervention to date has been futile, traders are not willing to take the risk. Meanwhile, New Zealand also reported a weaker than expected trade surplus in the month of May. This should not impact the first quarter current account balance due out tonight because trade data in the first three months of the year was healthy. Australia also reported softer leading indicators for the month of April, which comes in stark contrast to the stronger data that the market has become accustomed to seeing.