The Australian and Canadian dollars were the most market moving currencies today as oil and gold prices hit record highs.
This was largely due to the weakness of the US dollar, but oil prices have also been pressured by legal actions between Exxon Mobil and Venezuela. The continual rise in oil prices has now pushed gas prices to a record high in many states. A local news station in California is even reporting that the Americo gas station in Gorda, just south of Big Sur is selling regular unleaded gas for $5.19 a gallon. If this trend continues, there is a decent chance that gas prices could hit $4 a gallon nationwide by this summer. The rise in gold prices is causing another rush. Prices are so high that regular people around the world are digging up their scrap jewelry to be melted and sold on the open market. Sooner or later, this may cause a flush of inventory that could trigger a reversal in oil prices. The growth in the Australian economy is beginning to moderate with fourth quarter GDP and service sector PMI in February falling short of expectations. Meanwhile the Reserve Bank of New Zealand left interest rates unchanged at 8.25 percent. Even though the statement highlighted risks to both growth and inflation and the central bank said up that they will keep rates on hold for a significant period of time, RBNZ Governor Bollard warned that the New Zealand dollar is exceptionally and unjustifiably high against the US dollar. Does this mean that they will intervene in the NZD? Maybe, but as we have seen from their past intervention, there should not be a lasting impact on the currency. Australia will be releasing their trade data tonight and Canada will be releasing IVEY PMI tomorrow; expect more active trading in the commodity currencies.
