The com bloc lost the support of its commodity correlation Friday as volatility for crude and gold settled.
Instead, trading in the Canadian, Australian and New Zealand dollars were guided by active fundamental speculation. The loonie was arguably the most active currency among the three as traders received the growth numbers for March and the first quarter. Both readings would weigh on the Canadian dollar. Through March, the world’s 14th largest economy cooled 0.2 percent. Far more concerning though, the quarterly figure posted its first negative reading since 2003. Canada’s 0.3 percent clip of negative growth draws a notable contrast to the US’s as of yet positive readings. What’s more, the breakdown shows that the pressure on the economy is not just from the manufacturing sector’s troubles with unfavorable exchange rates and high input costs, but from trade and housing as well. For Australia, the Private Sector Credit report for April was a surprise fundamental driver. The 0.4 percent climb marked the smallest increase in borrowing in seven years – a reflection of high credit costs and perhaps fading consumer spending. No doubt, this will be a reading to consider next week when the RBA meets. There last report suggested they were considering a rate cut ealier this month. The RBNZ will likely raise similar concerns at their decision on Sunday.