AUD and CAD amongst poorest currency performers last week - BBH

Research Team at BBH notes that after sterling, the Australian and Canadian dollars were the poorest performers among the major currencies last week (-1.7% and -1.4% respectively).  

Key Quotes

“Although the unexpected contraction in Canada's October GDP (-0.3%) weighed on the Canadian dollar before the weekend, the Australian dollar fell more.  Recall that among the currency futures; the Australian dollar was the only one (that we track) in which speculators were net long.”

“The Aussie has fallen in seven of the past eight sessions.  It is down three consecutive weeks and eight of the past 12.  Before the weekend it neared the May/June lows (~$0.7145).  There weekly close below $0.7200 is important because it corresponds to the 61.8% retracement of this year's rally.  A move above there would help to stabilize the tone, but the technical indicators suggest this is unlikely. The next downside target is found around $0.7065.”    

“The US dollar has approached the 50% retracement of this year's drop against the Canadian dollar from multiyear highs in January.  The retracement is found near CAD1.3575 and repulsed the greenback last month.  It has a running start, with oil prices easing and the interest rate discount to the US widening.  The technical indicators are consistent with a continued uptrend.  The 61.8% retracement is near CAD1.3840, but before it gets there, the CAD1.3760 area may be important.  It corresponds to the measuring objective of the earlier flag pattern.”