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M111222
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PARTNERSAussie dollar down due to weak housing report
5/4/2011
May 4, 2011 - The Aussie dollar took a beating earlier in the day due to a weak housing report, but this was balanced by hawkish comments out of the region and the currency has recouped all off the losses. It is interesting to see today that metals and certain equity exchanges have sold off, so there is a risk aversion theme happening in those markets, but the US dollar is still under pressure overall due to Portugal announcement. It feels like traders are just taking profit in some markets and correlations between USD and equities has broken down, at least on the day. In Canada, the Loonie has been flat just above the 0.95 level and there is a lack of direction on the day. We see this listless trading on every big figure on the way down it would seem, but you still get the feeling the Loonie will continue to strengthen as it lags other majors in gains over the last month; we have yet to see the downtrend in USDCAD reverse. Watch out for Friday’s dual employment report reading as it should provide some volatility and future directional bias.
