Following the release of the minutes of the Reserve Bank of Australia’s recent policy meeting, the Canadian dollar is projected to bow down to its ComDoll counterpart today. Though on a bullish momentum of its own, the Loonie currency looks to step aside as the markets demand more of the Australian dollar also on speculation that talks among European leaders this week will lead to stronger measures to counter the region’s debt crisis.
Opening at the 1.0319 price mark, the AUD/CAD did not waver and resumed the stalled hike from yesterday. This opens up the currency pair for more upside price action in spite of a nearly overbought price index. As such, consider a buy bias for the pair today.
Amid a fragile global outlook, the RBA made no mention of intervening to curb the currency’s strength, which has persisted despite a decline in the terms of trade. In fact, the Australian central bank signaled confidence on its domestic growth in its decision to maintain the highest borrowing costs among major developed nations. The central bank predicts an expansion rate over the “medium term” at around the economy’s trend pace, even as Europe’s woes cloud the outlook, according to minutes of the RBA’s August 7 board meeting.
Considering the effects that these reports have on the currency pair’s exchanges, the Canadian currency is likely to temper its price movement. A buy position is suggested for the AUD/CAD today. Still however, be cautious of probable price corrections as the technical chart shows that the price index could tip over the overbought territory.
What could also likely temper the gains of the Aussie-Loonie is the release from StatsCan that sales at the wholesale level increased by 0.3 percent in June. Though not as strong as the 0.9 percent register for May, nor the 1.2 percent revised figure for April, the increment in the total value of wholesale sales still poses some demand for the North American ComDoll.
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