US$ slightly up this morning thanks mostly to safe-haven demand amid rising tensions in the Middle East. USD could be range bound today as investors await a Fed interest rate cut next week, UK elections this week and ECB meeting later in the week.
C$ is flat this morning and with no economic news out in Canada this week the currency be range bound versus the majors. C$ was at a 9-day low on Friday after disappointing May retail sales numbers fell 0.1 per cent versus economist expectations of 0.3 per cent increase. The surprise decline raises bets that the Bank of Canada could cut interest rates later this year.
EUR trading in the 1.12 this morning as all eyes will be on Thursday with the ECB meetings. The central bank is expected to maintain rates unchanged but signal easier monetary policy possibly in September. Any dovish signs could determine EUR/USD direction.
GBP will be under pressure this week as politics takes centre stage as the Conservative Party will elect a new Prime Minister on Tuesday. Fears of a victory by Boris Johnson is raising a chance of a no deal Brexit and potentially lowering growth forecast. It is expected Johnson will have a hard time gaining support on a Brexit deal from his party with several ministers threatening to quit. It is expected a general election would be called sometime this year.