aud fundamentals

Canadian Dollar, Australian Dollar Tumble as Carry Trades Consolidate Gains

Monday, 11 May 2009 21:13:57 GMT  |  Terri Belkas, Currency Strategist

The Canadian dollar and Australian dollar were the weakest of the majors on Monday, as USD/CAD rebounded from support at the 38.2 percent fib of 0.9056 - 1.3015 at 1.1509 while AUD/USD reversed from Friday’s high of 0.7707 and RSI turned up from oversold/bought levels on both pairs. That said, it is not yet clear if the moves denote a consolidation of the large moves we saw last week or if they indicate a true reversal. Fundamentally, Canadian data has been strong, as we saw on Friday. The net employment change had been expected to fall by 50,000 during April, which would’ve marked the sixth straight month of job losses. However, the Canadian economy actually added on 35,900 jobs during the month, keeping the unemployment rate at 8.0 percent. The increase was due to a surge in self-employment, as positions rose by 37,000, but since these sorts of jobs are known to be relatively unstable, the news isn’t a reliable sign of recovery. Regardless, the economies associated with the commodity dollars – Canada, Australian, and New Zealand – have all fared the global economic slowdown much better than nations like the US, Euro-zone, and UK, making the Canadian dollar, Australian dollar, and New Zealand dollar attractive from a macroeconomic perspective.

Related Articles: Canadian Dollar Weekly Trading Forecast, Australian Dollar Weekly Trading Forecast

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