Commodity gains boost Australian, Canadian dollars

[WASHINGTON] A surge in commodity prices, from oil to iron to copper, boosted the Australian and Canadian dollars against the US greenback Monday but other major pairings were stable.

Australia's dollar jumped 0.7 per cent to 74.7 US cents while the Canadian currency traded up 0.4 per cent at C$1.3284 per one US dollar.

But with markets already having prepared for more stimulus from the European Central Bank this week, and lack of any clear policy signal from two senior federal Reserve officials in speeches Monday, the US dollar-euro rate was little-changed from Friday at US$1.1013.

The yen edged up against both the euro and dollar.

"The ECB is widely expected to ease monetary policy this week yet the euro refuses to fall, which leads many investors to wonder if easing has been completely priced in," said Kathy Lien of BK Asset Management.

After disappointing financial markets with what were widely perceived as half-hearted measures in December, ECB chief Mario Draghi is expected to announce bolder policy moves Thursday.

They could include a further cut in interest rates, and an expansion of its quantitative easing program.

Meanwhile in Washington, Fed Vice Chair Stanley Fischer gave no hint of what the US central bank would or should do in its March 15-16 policy meeting, while Lael Brainard, who also sits on the Fed board of governors, counseled "patience" on interest rate decisions, given the slow global economy and the absence of inflationary pressures.

"Given weak and decelerating foreign demand, it is critical to carefully protect and preserve the progress we have made here at home through prudent adjustments to the policy path," she said.

But Mr Fischer signaled more optimism over the US economy this year, saying that once oil prices stabilise, he expects to see strong signs of growth and inflation.

AFP