US$ -Today investors will focus on Gross Domestic Product data where growth should be at 1.8% in the second quarter from the 3.1% annualized pace set in the prior period. The US$ will likely trade in step with GDP. The better the number the better the dollar will be today. A weaker GDP number below 1.8 percent could also have the Fed ease policy more than once this year.
C$ down for the sixth straight day as interest rate differentials moved further in favour of the USD. Yesterdays news that showed domestic average weekly earnings rose in May at the fastest pace in 1 months was not enough to keep the CAD higher. All eyes are will be on U.S GDP today with no economic news out of Canada.
EUR rose from a two-month low against the dollar yesterday after the European Central Bank failed to deliver an interest rate cut that some investors had expected. President Mario Draghi though offered a glimmer of optimism about his outlook on the euro zone economy. Draghi said in his statement the rates would stay “at their present or lower levels” at least through the first half of 2020 and opened the door for more quantitative easing. He also stated that he saw low risk of recession, but had concerns about low inflation in the euro zone.
GBP traded below $1.25 yesterday. The win by Boris Johnson as the new Prime Minister was mostly priced into the Pound. The small recovery since was largely profit-taking from investors who shorted the dollar. The focus now turns to whether Johnson will follow through on his previous statements about trying to get more concessions from the EU, and taking Britain out of the EU in October without a deal if he cannot achieve that.