Friday August 23rd, 2019

US$ remains firm vs major currencies. Oil prices fell slightly and CNY hit its lowest level since the financial crisis as markets await Fed Chairs speech today. Fed Chair Powell will address the Jackson Hole symposium of central banks at 2pm EST. The speech will be watched closely for indications if the Fed will cut rates at its next meeting in September after fellow policy makers signaled reluctance to cut US interest rates. CNY has depreciated approximately 2.6% since Aug1st hitting 7.1072 overnight. Fed Chair Powells speech is the primary market focus today, ahead of his comments expect currencies to remain range bound. G7 Summit this weekend.

C$ weakened towards higher end of its recent range, lower oil prices and general US$ strengthening into Fed speech. Canadian retail sales could have an impact on C$ if it’s outside expectations. 1.3350 remains key resistance and should hold the topside of the range today. Longer term bias remains to buy US$ dips.

Eur weakened on general US$ strengthening. Expectations remain that Europe will have continuing weak growth into the 3rd quarter and pressure remains on the European Central bank to deliver further stimulus to support growth. Intraday Expect Eur to remain under pressure, trading towards the lower end of recent trading range.

GBP boosted by German Chancellor comments remains above 1.22 vs US$, but remains vulnerable to further Brexit comments from the G7 summit. Expect range bound markets until Fed speech, and then later in the evening BOC governor is also speaking.