The commodity block currencies have been hit hard of late and are once again extending declines to multi-month lows against the US dollar. We’re seeing clear divergence in monetary policy outlooks with deteriorating economic data in Australia, New Zealand, and Canada weighing on the respective currencies, while the added risk of trade wars only makes things that much more challenging.
Of course, the Canadian dollar is also contending with political drama in Canada amidst a string of key resignations. Economic data has more or less been softer in most major economies outside of the US, including the Euro area. On Tuesday, US data went the other way again with retail sales coming in above forecast. It’s been fairly easy to understand why the US dollar has been so well bid and US equities remain propped up.
Key standouts on Wednesday’s calendar come from UK inflation, Eurozone inflation, US housing starts, and building permits, and of course, the Fed decision late in the day.
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