Friday November 8th, 2019

The trade negotiations continue to dominate market sentiments, but conflicting trade-related headlines raised some skepticism about on trade deal negotiations. The markets are waiting for the US to confirm their agreement to the rolling back of tariffs, which appears to be the last hurdle to signing. The US$ is the currency of choice for investors today, with all the major currencies coming under-pressure on US$ strength. The JPY hit a 5-month low vs US$, whereas CNY the exception to US$ strengthening rallied to a 6-week high vs US$. US unemployment data out this morning will be watched closely for intraday direction.

The conflicting trade comments caused oil prices to ease, putting additional pressure on C$ which is trading at the key 1.3200 level. The signing of the trade deal will be positive for C$, until then the loonie remains vulnerable to further weakness. Both Canadian and US employment data is out today and will provide intraday direction. Canada is expected to add 15,900 jobs in Oct vs 53,700 in Sept.

Euro continued to weaken after breaching the key support of 1.11 vs US$. Contradicting headlines on the trade talks caused investors to unwind Euro for US$. A positive outcome to the “phase one” trade talks should see Euro rebound, but for now it’s a waiting game. US Employment data will provide intraday direction for the currency.

The split votes by BOE members on the interest rate cut decisions yesterday and BOE’s gloomy outlook for the UK economy put selling pressure to GBP. On the political all the major parties continue to sell their Brexit strategies ahead of the Dec12th election. Conservatives remain in the lead in the poll’s, but the outcome remains far from certain. 34 days until the election and expect GBP to remain vulnerable to market volatility.