More Gains in Store for the Australian Dollar, Finance Minister Cullen Warns of Inter

The Australian dollar climbed to new highs against the US dollar despite the lack of economic data. Big investors here in the US and in Japan continued to plow into the currency on expectations that the Reserve Bank of Australia may raise interest rates in August. Tonight?s import and export prices will give us a good clue on whether they will actually raise rates.

The market is looking for softer inflationary numbers, but any upside surprises will exacerbate the strength of the currency. New Zealand, the country that actually has a rate decision next week consolidated near its 25 year highs. Finance Minister Cullen warned yesterday that he has the power to influence the Reserve Bank?s decision so Kiwi traders should not assume that the currency is a one way bet. Finally Canada released stronger than expected wholesale sales but weaker international securities transactions.