FXStreet (Delhi) – Jane Foley, Research Analyst at Rabobank, suggests that as the commodity prices have been showing signs of life in recent sessions and the better tone has been reflected in a better tone of the CAD with USD/CAD positioned close to the bottom of its trading range and NZD well supported. Key Quotes “It is not just oil prices that have popped a little higher this week. Global dairy prices have risen for a fourth consecutive time in the Fonterra fortnightly auction.” “There is also concern in New Zealand about slower grass growth on the back of a possible El Nino weather pattern. It seems that for dairy the supply glut is being addressed far more rapidly than in oil and in commodities such as iron ore and coal and this suggests scope for a more rapid recovery in price.” “When it cut interest rates to 2.75% on September 10, the RBNZ warned not only about the economic adjustment that has followed from the drop in export prices but also about the plateauing of construction activity in Canterbury. The RBNZ was also candid about the need for the NZD to fall further and about its intention to cut rates further.” “While the pushing back of US interest rate expectations has also been a supportive influence NZD/USD, we see the risk that the RBNZ are likely to cut rates again as limiting upside potential for the NZD and we retain the view that NZD/USD could slip towards 0.60 on a 12 mth view.” “We do not expect the BoC to cut rates further this cycle. The weaker CAD appears to have had a positive impact on the country’s non-energy industries. Overall, we maintain the view that USD/CAD is likely to remain within a 1.30 to 1.34 range in the coming weeks. A break lower would likely be preceded by further gains in the price of oil and would put the USD/CAD1.2950 area into view initially.” For more information, read our latest forex news.