The Canadian, Australian and New Zealand dollars sold off significantly as the combination of dollar strength and commodity price weakness drives the currencies lower.
The bull run in commodities is largely dependent on the trend of the US dollar. Even though there isn’t a one to one link between the direction of oil and the dollar, dollar weakness on Friday was one of the primary reasons why oil prices surged to a new record high. Looking ahead, the Canadian dollar will be a big focus tomorrow with the Bank of Canada interest rate decision and the trade balance due for release. Each one of the 30 economists surveyed by Bloomberg expects the BoC to cut interest rates. Although oil prices are skyrocketing which should benefit some Canadian companies, consumer confidence has fallen to a 7 year low as the economy shrank by 0.3 percent in the first quarter. Australia also has a few numbers due for release tonight including home loans, ANZ job advertisements and NAB business confidence. These are tier 2 data and should only have a limited impact on the Aussie.
