The commodity currencies reaped the benefits from improving sentiment over the global economic recovery - with oil firming near its highest levels in 17-months just shy of the $87-per barrel level. The Canadian dollar topped the parity mark against the greenback for the first time since July 2008 to trade around 0.9991 on the heels of upward pressure on crude and market expectations for the Bank of Canada to tighten policy.

The Reserve Bank of Australia announced its monetary policy decision overnight, raising interest rates by 25-basis points from 4.0% to 4.25%. In the accompanying policy statement, RBA Governor Stevens provided clues that further interest rate hikes can be anticipated over the coming months. He characterized current interest rate levels as somewhat lower than average while the Board judges that with growth likely to be around trend and inflation close to target over the coming year, it is appropriate for interest rates to be closer to average. The Australian dollar remained buoyed against its US counterpart, edging up to an 11-week high around 0.9257.

The minutes of the FOMC March meeting revealed that most members believed the extended period language would not preclude prompt policy tightening if needed with policy makers observing that inflation expectations remain reasonably well-anchored. There were heightened worries over the labor market, with many fearing a recovery would be unsustainable without a pickup in jobs. The minutes also noted that if the economic outlook deteriorates or trend inflation declined further, the extended period of exceptionally low rates could last quite some time.

USDCAD hovers around the parity mark, with support eyed at 0.9970, followed by 0.9940 and 0.99. Additional floors are eyed at 0.9860, backed by 0.9830 and 0.98. A move back above 1.0000 will target interim resistance at 1.0045, followed by 1.0070 and 1.01. Subsequent ceilings will emerge at 1.0130, followed by 1.0160 and 1.02.