Friday September 20th, 2019

The US$ weakened vs the major currencies after the FED cut and other key central banks kept their rates unchanged. The ongoing Sino/US trade discussions continue today, but mixed signals from white house advisors caused some confusion for investors. The Japan/US trade talks should be completed next week, with Japan seeking assurances of no future auto tariffs. In the middle east geopolitical risk remains high as major oil producing countries tighten up their security in attempts to maintain global oil supplies. The lack of escalation between Saudi & Iran has been seen as positive signal.

Oil is starting today’s session up 7% for the week to date following the Saudi attack on the weekend. Despite stronger oil prices and the Fed cutting interest rates, C$ remains within its broader trading range this week. Investors appear patient looking to sell US$ vs C$ at levels over the 1.3300. Potential fall out for the Liberal party from PM Trudeau’s apology & Canadian retail sales this morning may provide C$ some short term direction today.

European equity markets are looking to have a 5th straight week of gains, but overall investors remain cautious of the potential of a wider economic slowdown in Europe. Eur vs US$ remains stagnate within its current trading range. Mixed Brexit signals and slow progress in the Sino/US trade talks continue to weigh on the currency.

GBP rallied to a fresh two-month high on EC President Juncker optimistic comments that a deal is possible & suggestion that an Irish boarder solution is feasible. Other EU officials cast doubts about the seriousness of the new UK proposals on Brexit countering Juncker’s comments. Investors appetite for GBP remains strong on any « Good Brexit » news, which highlights the potential of future GBP rallies. 41 days to Brexit deadline.