On a day to day basis, we have seen big moves in the Australian, New Zealand and Canadian dollars this week.
However even though the daily trading range is large, if you take a step back, these three currencies are basically stuck within a wider range against the US dollar. They are now testing the bottom of that range which suggests that a breakdown may be possible. Although weaker economic data can be blamed for the CAD’s turn back towards parity, Australian and New Zealand data have been decent and commodity prices have been holding up well. This means that the latest wave of weakness has been spurred by nothing other than risk aversion.