Tuesday October 1st, 2019

US$ strength continues as it hits 29 month highs, boosted by the resumption of trade talks and positive US economic conditions. Expectations are that the US$ will remain firm as Investors are cautious of Eur and the growing sentiment that the FED will hold interest rates. The Reserve Bank of Australia cut its interest rates today, which caused the AUD to weaken. A number of key US data releases out today, as well several Fed governors are speaking which could impact markets today.

Oil prices rebounded overnight as OPEC output dropped to its lowest level in 8 years and US production fell for a 3rd month. C$ has been relatively stable compared to its peers, remaining within a tight trading band. Any surprises from the Canadian GDP and Manufacturing PMI data out today could possibly see the currency break out of its current range.

EUR remains under pressure hitting a new two-year low vs US$. Euro-zone economic conditions continue to struggle and German CPI rose less than expected showing signs inflation is losing momentum despite last month’s ECB stimulus measures.

UK PM said he wants a Brexit deal and said it will remove the Irish backstop. The markets are awaiting for the PM to officially announce his proposal, but initial reactions appear to be skeptical. GBP starts the day relatively firm considering the uncertainty around Brexit. GBP short term direction will be driven by the response to UK PM Brexit proposal. 30 days to Brexit deadline.