Friday September 6th, 2019

Investors appear to be ending the week on a positive note as optimism grows for Sino/US trade resolution, positive US data and reduced risk on “No-Deal Brexit in the UK. US$ index remains relatively stable, safe haven currencies continue sell off and China CNY rebounded. US Nonfarm payroll and Fed Chair’s Powell speech will be watched closely and will provide intraday direction.

C$ failed to extend beyond its current trading range, despite general up beat market sentiment and stronger oil prices. BOC Deputy Governor commented that the Canadian economy is showing “a welcome degree of resilience” to negative shocks. Positive central bank tones and decent economic data has seen investors returning to buy C$. Canadian unemployment data out this morning should provide intraday direction to the currency.

German industrial production remains weak with a drop of 0.6%, increasing investor concerns of recession. Eur has remained relatively resilient despite the increasing somber economic data. The focus will be on European Central Bank next week, but officials appear to be tempering expectations for aggressive easing. Expect Euro to remain vulnerable to further weakness.

GBP has consolidated from its highs of the week vs US$. Lawmakers are expected hold another vote on Monday on whether to hold an early election. The primary concern for opposition parties is to ensure that an election doesn’t allow the UK PM to execute his “No-Deal” Brexit pledge. Expect GBP to remain volatile, predictions suggest a “NO-Deal” Brexit could see GBP fall below 1.15 level. 55 days to Brexit deadline.