Weaker Economic Data Drives Canadian, Australian and New Zealand Dollars Lower

The US dollar has rebounded strongly against the Canadian dollar following very disappointing inflation and trade data. The strength of the Canadian dollar has pushed industrial product prices down by 1.1 percent last month and the current account surplus to the lowest level since September 2003.

At this point, we think that USDCAD will take another stab at parity and try to test our resistance level of 1.0150. This move could easily be triggered by the Canadian GDP numbers tomorrow, which are expected to be weak. As for Australia, capital expenditure in the third quarter was much weaker than expected. We also expect tonight’s current account numbers to be soft. New Zealand business confidence and money supply both deteriorated from the previous month, which added pressure to the currency today.