With gold and platinum prices hitting a record high of $929.20 an ounce today, it would be surprising if we did not see similar strength in the Australian, New Zealand and Canadian dollars.
These three currencies have already performed extremely well last week despite mixed economic data. The drivers remain the same this week with the New Zealand dollar rallying despite a sharp drop in the country’s service sector PMI report which fell from 62.6 to 53.9 in the month of December. Although there is no way that we will be fading New Zealand dollar’s strength, the combination of weak economic data and RBNZ Governor Bollard’s warning that the currency is overvalued leads us to believe that if the market becomes suddenly risk averse once again, the New Zealand dollar may fall the hardest. Meanwhile traders of the commodity bloc should keep an eye out for Australian business confidence and Canadian business orders, which are due out tomorrow.