cad fundamentals

Australian, New Zealand, Canadian Dollars Reverse Course as Commodities Tumble

Wednesday, 07 January 2009 20:58:49 GMT  |  Terri Belkas, Currency Strategist

The Australian dollar, New Zealand dollar, and Canadian dollar reversed course on Wednesday as traditionally “risky” assets, including equities, commodities, and forex carry trades, fell across the board. In fact, crude oil plummeted approximately 12 percent as the US Energy Department reported that declining consumption led inventories of crude oil, gasoline and distillate fuel to rise last week. There will be some event risk on hand for the Canadian dollar on Thursday morning as the Ivey Purchasing Managers' Index (PMI) - a gauge of business activity - is forecasted to fall to the lowest level since record keeping began in 1999 during December from 40.2 in November. Any declines will suggest that the Canadian economy is the next to head for recession, though it has held up well relative to countries like the US as domestic demand holds strong. Index readings below 50 signal a deterioration in activity, and traders should keep an eye on the individual components of the index, particularly employment. Indeed, this component can sometimes serve as a good leading indicator for the release by Statistics Canada of the net employment change on Friday. Furthermore, Ivey PMI can be market-moving for the Canadian dollar, with disappointing figures likely to weigh on the currency.


**For a full list of upcoming event risk and past releases, go to the DailyFX Calendar

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