Commodities currencies holding up much better than commodities

It’s been an odd week as far as commodity currencies are concerned. Oil and gold have each fallen about 10% this week but the the AUD and CAD are barely changed.In the case of Australia, anticipation of firmer interest rates ahead, in addition to the 75 basis points of tightening already this northern fall is helping cushion the currency. AUD also seems to be better supported having begun its correction well-ahead of the turn in the dollar over the last week, which coincided with the oil and gold slides.AUD topped out four weeks ago and shook out a considerable number of speculative longs as it fell from just above 0.94 to just below 0.8950.USD/CAD is marginally firmer on the week, perhaps 50 pips above opening levels. Given that the BOC and the Fed appear to still be in sync on monetary policy (the BOC renewed its vow to keep policy steady through the first half of 2010), I would have expected a greater reaction from speculators to the slide in the closely watch EUR/USD pair. Since CAD does not enjoy the interest-rate cushion of the AUD, I would have anticipated a firmer USD/CAD.Recent comments from the Russian central bank announcing their intention to add CAD to their reserve portfolio may be helping underpin the Loonie, especially if other reserve managers are spreading around their reserves North of the US border as well.Technically, USD/CAD looks spooled up for a move from present levels near 1.06 I’d use the triangle pattern playing out on the daily charts as a catalyst, doing a “go-with” trade if we sustain a break through the support level at 1.0460 or above 1.0705

Greece vows major reforms, seeks no bailout

BRUSSELS, Dec 11 (Reuters) - Greek Prime Minister George Papandreou said on Friday his new socialist government would undertake major reforms next year to curb the country's budget deficit, adding that it needed no bailout. "There is no time to waste, major reforms will take place in 2010," he told a news conference after an EU summit in Brussels. (Reporting by Jan Strupczewski; Writing by Ingrid Melander and Harry Papachristou)

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