Reserve Bank of Australia Governor Glenn Steven sent the Aussie Dollar to a 14 month high today with hawkish commentary that almost guaranteed a rate hike come November. Comments stating that the RBA ''can't be too timid'' in regard to raising the key Australian interest rate helped to reinforce the RBA's stance as a frontrunner of the G20 nations trying to shrug off the stench of the global credit crisis. AUD/USD took off from early session lows near 0.9145 on its trek to highs over the 0.9220 levels. Early 2009 lows close to 0.6250 have long been forgotten on the Aussie's ride toward parity. AUD/JPY was able to post a 70 pip gain to just over 82.45 on the move.
The good news from Down Under was aplenty; with New Zealand CPI coming in stronger than expected at +1.3% as opposed to the projected +0.6%, and higher inflation data coupled with stronger retail sales seemed to point to a possible rate hike sooner than later.
NZD/USD exploded to a 15 month high from 0.7390 to just over 0.7450 on the data with an eventual top of 0.7480 for the session. Conversely, AUD/NZD did a straight line decline from the 1.2360 area to the 1.2280 levels. All in all, it was a big day for the Pacific Rim currencies.
The other majors were boosted by the high yielders, all posting gains against the crippled greenback. EUR/USD pushed higher by 40 pips, breaking through a key resistance level at 1.4950 to finally top out at 1.4960. The Pound, not to be left out, drove from 1.5970 early in the day to 1.6065 highs by day's end. The Canadian Dollar, usually mentioned with the Aussie and Kiwi dollars as commodity currencies, hit a 1.0200 15 month high as well against the battered buck.
Tomorrow brings some vital data out of the US in the form of CPI, Unemployment Claims, Empire State and Philly Fed Manufacturing Indexes.
