Canadian dollar remains the weakest major currency this week as the slide in crude oil continued. WTI crude oil reached as low as 36.38 as recent down trend continues and that pushes USD/CAD to as high as 1.3654 so far today. The fall in oil price is a result of worries over further supply growth s OPEC data showed productions rose to the highest level since April 2012, at 31.7m barrels per day. Meanwhile, there is continuous worry over China's slowdown that could lower the demand for commodities. AUD/USD dollar was lifted by employment data yesterday but the strength was brief. AUD/USD's rebound was limited below recent resistance at 0.738/9 and weakens notably today.
New Zealand business NZ manufacturing index rose to 54.7 in November. NZD/USD was lifted yesterday by the hawkish RBNZ rate cut. Despite lowering the OCR by -25 bps to 2.5%, the accompanying statement appears less dovish than market expectations. Indeed, the staff now forecasts inflation would take longer to return to 2%. Yet, they at the same time upgraded the growth outlook. We expect the current record low policy rate would stay unchanged for 2016.
Looking ahead, German CPI final will be released in European session. But main focus will be on US data. Advanced retail sales is expected to show 0.3% growth in November, same as ex-auto sales. PPI is expected to rose to -1.2% yoy in November while core CPI is expected to rise to 0.8% yoy. Business inventories and U of Michigan confidence will also be released.