A budget that increases the deficit, declining housing and weak economy are likely to keep rates down and are driving the C$ to a new weekly low. Any strength today would be a good opportunity to sell C$ as the trend remains towards weakness.
The US$ has fully recovered from the weakness of two days ago and remains strong this morning. We foresee new highs over the longer term and urge US$ buyers to put on hedges on any weakness.
The EU has offered Prime Minster May a two-week Brexit delay to April 12th, helping GBP higher while sinking the EUR back to the lows seen a week ago, as EU interest rates remain weak. Long-term the EUR will likely hit new lows regardless of the Brexit outcome. Any strength today should be sold.
- Drummond Gill