The Australian, New Zealand and Canadian dollars all came under heavy selling today as traders piled out of high yielding currencies. The market seemed to care little about the stronger than expected Australian and New Zealand data.
Australian leading indicators increased 0.4 percent while third quarter inflation expectations in New Zealand rose to 2.64 percent from 2.58 percent. In what could be construed as mildly hawkish comments, RBA Deputy Governor Battellino said that recent liquidity injections did not represent a change in monetary policy. In contrast BoC Deputy Governor Duguay was far more cautious about the global financial situation, which suggests that the central bank will keep interest rates unchanged next month.
Written by Kathy Lien, Chief Currency Strategist of DailyFX.com