With commodity prices easing, the Australian and Canadian dollars have given back their gains.
Economic data was mixed providing little direction for the commodity producing countries. In Australia, consumer inflation expectations for the month of May continued to grow, which validates the hawkish minutes from the Reserve Bank’s most recent meeting. Despite today’s retracement, we believe that the Australian dollar could reach parity with the US dollar in the coming weeks. Canadian retail sales on the other hand were weaker than expected as sales of clothing and accessories declined. The slowdown in the US and the severe winter weather has taken a big toll on consumer spending. The New Zealand dollar on the other shot upwards following the tax cuts announced by the Prime Minister. With the economy growing at the slowest pace in 10 years, the New Zealand government has delivered their first tax cut since 1999.