Commodity Currencies Rise, RBA Expected to Leave Rates Unchanged
The Australian, New Zealand and Canadian dollars all gained strength against the greenback today amidst higher commodity prices. Oil hit a record high above $120 a barrel, triggering a sharp rally in the Canadian dollar. The IVEY PMI report is due for release tomorrow and even though the Canadian economy has seen some spillover effects from the US, the rise in leading indicators suggest that business sentiment could not be as bad as the market expects. The Reserve Bank of Australia will be making a monetary policy decision tonight. Although they are expected to leave interest rates unchanged, the Australian dollar could see some volatility on the heels of the monetary policy statement. Retail sales improved last week, but service sector PMI dropped into contractionary territory in the month of April, which could be worrisome for the RBA. Prior to the interest rate decision, the Australian trade balance report will be released.