Next week, the economic news cycle is going to be dominated by the big central bank events, such as the FOMC meeting. But some of the smaller data points could get missed in the shuffle. Among them, some potentially good news for commodity currencies. The AUD in particular could stand out.
Yesterday, the Aussie did particularly well, leading some analysts scratching their heads as to what was going on. There was no major news out of China that would justify a rally. Conversely, crude prices have been moving higher, but the CAD has seen somewhat lackluster performance. It seems like there is something going on in the commodity space that isn’t obvious from a superficial look.
Australia’s winning streak
Australia saw its unemployment rate stay relatively low at 3.7%, which was seen as leaving inflationary pressure on the RBA. But it seems that the reserve bank is still pretty much in a pausing mode. The rate sensitive 2-year yield on Australian debt, however, moved higher through the week. This implies that traders are starting to bet that the Aussie could stay strong for some time to come.
Monday night (or Tuesday morning, depending on where you are in the world) the RBA will publish the minutes of its latest meeting,…