US Dollar Falls Against Commodity Based Currencies

Posted September 12, 2010

Data out of China helps to push commodity backed currencies higher against US dollar. Global growth moves towards positive light.


During the Friday currency trading session, the US dollar moved lower against the Australian dollar and the New Zealand dollar, both of which are considered commodity backed currencies. This comes on the heels of positive economic growth data released out of China. These currencies are closely tied to the movements of global economic growth. 

China Data

One of the main elements moving the markets on Friday was the release of key economic data out of China. There was a narrowing of the trade surplus with China. This also showed a stronger than expected improvement in the number of imports. This helped to encourage investors that the demand for Chinese product is up even as the country has worked to slow its growth pace. 

Economic Data

On Thursday, positive and better than expected data out of the US also helped to push the currency markets, as did the Australian economic data. Investors are also looking forward to a weekend that could offer even more positive growth numbers out of China. 


The movements of the euro were somewhat tied to the upcoming international banking regulators meeting that is to occur this weekend in Switzerland. Investors are still concerned with the health of the European banking sector, after reports that recent stress tests may not have been as promising as what was reported. The euro did manage to pull ahead during the Friday trading session, but those gains were somewhat capped as investors remained cautious about these meetings.

Canadian Dollar

The Canadian dollar is also a commodity backed currency. It had gains earlier in the day, but gave back some of the gains it had during the early portion of the trading day. Those gains, spurred on by the move of the Bank of Canada’s increase in the key lending rate and a positive jobs report, were cooled when the governor of the bank stated that it was unlikely that any additional increases would occur in the key lending rate this year.

By The Numbers

By the end of trading on Friday in New York, the euro moved from US $1.2703 to US $1.2712. The euro moved from Y 106.49 to Y 107.03. the US dollar moved from Y 83.83 to Y 84.21. The US dollar moved from CHF 1.1052 to CHF 1.0197. The UK pound moved from US $.15438 to US $1.5358.