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Aussie and Kiwi Give Back Gains, CAD Rallies on Strong Data

Wednesday, 11 April 2007 21:29:49 GMT

Written by Kathy Lien, Chief Strategist
Having rallied significantly over the past month, we are not surprised to see a mild correction on the back of broad dollar strength in the both the Australian and New Zealand dollars today.  There were no surprises in last night’s home loans and investment lending reports, but tonight unemployment number could be a big market mover. 

The labor market in Australia is very healthy but recent disappointments in economic data have analysts forecasting slower job growth.  The risk is for an upside surprise, which will drive strong gains in the Aussie as the market will look to at least 6.50 percent rates this year.  Meanwhile the Canadian dollar surged to a fresh year to date on the back of strong housing starts in the month of March.  Canadian data has consistently surprised the upside.  This has kept the currency shielded from the recent drop in oil prices. 

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