In the confrontation between two commodity currencies, the Canadian dollar was stronger for the third month in a row. A distinctive feature of the Canadian dollar that sets it apart from other currencies was the support of the Bank of Canada, which has the most hawkish monetary policy among regulators at present. It recently announced its readiness to raise the rate next year. This gave the CAD an advantage over other key currencies. In addition, oil prices are rising and despite a series of disappointing macroeconomic reports, the Canadian dollar is still strengthening and shifting the support line down. So the rates currently located at the 6-month low, are likely to decrease to new minimums.
The Australian dollar was supported this week by strong macroeconomic reports in Australia and China, but this was not enough in the fight against the CAD. Nevertheless, the NAB business confidence index has reached a record high, and the number of permits for the construction of new homes remains at maximum values and in line with forecasts. The Chinese economy showed the strongest volume of imports in 10 years in March, which is very important for Australia. Data on China's trade balance was higher than expected and stimulated the demand for commodity assets.
Today, the driver in the rates was the OPEC report of an upward revision of forecasts for oil demand. According to analysts, oil prices may rise further, given the tense situation in the Middle East. Most technical analysis tools indicate a further decline in the rates to new lows, and the daily chart shows a possibility of a trend reversal. In the current situation, we consider the deals to SELL to be the most effective.
