With the Fed expected to keep interest rates at 2% and the BoC expected to cut at least one more time, traders sold Canadian Dollars because of the widening interest rate spread. This trend should continue over the short run.

The Canadian Dollar also sold off on the weakness in the crude oil market. For weeks, the CAD had been propped up by a strong energy market as the Canadian economy relies on exports of crude oil. Thursday's big break in crude accelerated the USDCAD to the upside. If the Dollar is bottoming and money is flowing out of commodities, look for this trend to continue with the USDCAD breaking out to new high for the year.

Signals are mixed in the AUDUSD and NZDUSD. Traders have been holding the Aussie steady to higher over the past two weeks in anticipation of another rate hike by the Reserve Bank on June 3. The overall weakness in commodity prices may drive the Aussie lower as the Australian economy relies heavily on commodity exports.

The lack of consumer confidence and lower commodity prices is bearish news for the New Zealand Economy. Continue to look for weakness.

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