The Canadian and New Zealand dollars recovered on the back of today’s improvement in risk appetite.
Canadian raw material and industrial product prices were weaker than expected, but these numbers were not particularly market moving. The Australian dollar should have also recovered but dovish comments from the Reserve Bank kept the currency under pressure throughout the day. The RBA left interest rates unchanged at 7.25 percent, which was no surprise, but Stevens said that the central bank’s monetary policy will cool demand growth which will help ease inflation. Although prices have climbed significantly over the past few weeks, Stevens expects prices to fall over time.
