The Canadian dollar extends its losses against the Australian currency today following economic releases from the world’s second largest economy and the Land Down Under. The markets are in a wait-and-see mode as US fourth quarter earnings come in.
Even as crude oil, Canada’s largest export, rose 0.1 percent to $93.25 per barrel, the Loonie is anticipated to weaken to the Aussie. Oil prices have been on an uphill-downhill course in the past few days as market participants seek cues from the global markets. In fact, oil fell yesterday after the Energy Department report showed US crude inventories rose 1.3 million barrels last week.
Earlier today, the Australian Bureau of Statistics reported that home-building approvals in the Land Down Under advanced for the third time in four months in November as lower interest rates encouraged plans for apartment projects. The number of permits granted to build or renovate houses and apartments gained 2.9 percent from October, when they fell a revised 5.1 percent, according to the report. Though the result failed to reach the median forecast for a 4 percent gain, this proved to be welcome news for the Pacific nation coming from a shortfall the prior month.
Moreover, Chinese data released earlier showed that imports rose to a record in the nation’s biggest overseas market. China’s exports rose 14.1 percent in December from a year earlier while imports increased 6 percent, leaving a trade surplus of $31.6 Billion, according to the Customs General Administration of China.
“The Chinese data is a whole lot better than anyone expected with both imports and exports accelerating,” said Mike Jones, a currency strategist at Bank of New Zealand in Wellington. “That will only add to recent investor optimism that the Chinese rebound has got legs and should take the Aussie dollar higher.”
A long position is advised for the AUDCAD, though be wary of probable technical price corrections as the price index treads near the overbought territory.