Another busy overnight session with the US$ coming off its recent highs. Optimism of a trade solution grew slightly, boosting european equities and currencies. The EU elections have started and the prospect that eurosceptic parties across the continent may perform well. In the UK, PM May announced she is stepping down and the country still has no Brexit Strategy. Oil, after posting its biggest daily loss in 6 months Thursday, Oil rallied back overnight up 1.4%.
US$ retreated from its 6 day high vs C$ on the back of the stronger oil prices. The volatile oil prices and global economic concerns will continue to weigh on C$. Today, we may see a retest of recent US$ lows if oil prices continue to firm and any C$ still has the potential to extend to April’s US$ lows.
EU rallied from its recent lows with trade optimism rising and positive showing in EU/Denmark polls with eurosceptics underperforming. Expect EU to remain in the current range until the EU elections results are in.
GBP firmed on the news of PM May’s resignation. Expect GBP to remain volatile and vulnerable to sell off’s until a new PM is found and a Brexit strategy can be developed.
US data today may provide some short term inter-day direction. There are a lot of uncertainties within the market and expect investors to continue to look to safe-haven currencies.