Uptrend in the Canadian, Australian, and New Zealand Dollar Continues
The rally in the Canadian, Australian and New Zealand dollar has continued thanks to the combination of stronger economic data and US dollar weakness. The Aussie hit a new 24 year high and we believe that it is on its way to parity. Just 5 months ago, the AUD/USD was trading at 88 cents and now 800 pips or 9 percent later, parity is within reach. Consumer confidence jumped 2.7 percent this month from a 15 year low thanks to the record income tax cuts announced by the Treasury. All this needs to do is translates into stronger consumer spending and parity will be reached. Meanwhile the Canadian dollar benefitted from hot consumer prices, the new high in oil prices and the first rise in leading indicators in 3 months. If retail sales also beat expectations, the Canadian dollar could test its year to date high. Although the New Zealand dollar primarily strengthened on its correlation with the other commodity producer currencies, it too benefitted from a sharp increase in credit card spending last month.