The commodity currencies are on a roll — proving that the combination of higher interest rates and better growth is hard to resist. Even rising risk aversion fails to significantly undercut the Canadian and Australian dollar.
Both are at session highs after AUD/USD took out 1.05 barriers and USD/CAD edges toward parity for the first time since May.
It has been four consecutive days of declines for USD/CAD so the move is nearing its limit but you can’t ignore the series of lower lows and lower highs since June.
Barriers are likely ahead of parity and Canadian GDP will be released tomorrow so the downside from here is limited.