Australian, Canadian and New Zealand Dollars Shrug Off Gains in Commodities


Despite the rise in gold and oil prices, the Australian, New Zealand and Canadian dollars continued to slide on rising risk aversion. The New Zealand trade balance came out worse than expected which added fuel to the kiwi's slide. Like the UK economy, the New Zealand economy has been deteriorating significantly with many economists calling for a possible recession and rising commodity prices is the primary reason why imports and exports are both higher. There has also been talk of a possible rate cut by the Reserve Bank of New Zealand. Meanwhile, even though there was no economic data from Australia or Canada, the intraday comments from Bank of Canada Deputy Governor Longworth were perceived as dovish - he said that inflation and growth might actually be slower than they had projected in July. Looking ahead, risk appetite and weather patterns will continue to drive the price action of the 3 commodity producing currencies.