Dollar Sustains Losses

The dollar sustained last weeks losses on Monday pressured by last week’s dismal employment figures and comments by a Fed official who said rates would remain low for ‘quite some time.’ Commodity based currencies were the big winners on Monday and many currency experts say the Aussie and Canadian dollars are on track for parity with the greenback. Increasing US demand for Canadian oil and natural gas and Chinese demand for Australian iron ore and coal helped both currencies to gain in Monday’s trading session. John Kyriakopoulos of National Australia Bank Ltd predicted, “The global economy is going to strengthen, and the recovery is going to broaden out from what has so far been a China-, Asia-led global recovery. We’re forecasting parity for the Aussie dollar, and we actually think the Canadian dollar will go through parity.”

Aussie, Loonie Parity Predictions

The Aussie gained 0.6% trading at 93.04 U.S. cents and was the third best performer in 2009 against the 16 most traded currencies. National Australia, Royal Bank of Scotland Group Plc, JPMorgan Chase & Co predicts the Canadian dollar will achieve parity with the greenback by June 30th 2010. National Australia Bank Ltd predicts the Aussie will achieve parity by March 31st. Commodity based currencies posted 2009’s biggest gains against the US dollar.

Commodity Currencies Big Winners

The most active commodity currencies are he Aussie, loonie, Brazilian real, Norwegian Krone, South African rand and New Zealand dollar. On the positive side history points out that US economic recovery coincides with increases in commodity prices and the Aussie and Canadian dollars. According to the Tihanyi of Bank of Nova Scotia, “A lot of the Canadian dollar gains up to now have been happening in the absence of strong growth in the U.S. Through this year, you’re going to see growth come back to what you might see in a normal year, and along with that you’re going to see a pickup in trade and demand for Canadian products.”