Monday September 9th, 2019

US$ remains generally weaker vs major currencies after Fridays jobs data and expectations that the Fed will cut rates at its next meeting. Fed Chair on Friday cited “risks in particular U.S.-China trade tensions that may derail the current U.S. economic expansion”. Market optimism for US/Sino trade talks remains positive, the ongoing Hong Kong protests could have an impact on the trade talks.

Investor demand for C$ grew on the back of Fridays stronger jobs data and the expectations that BOC will keeps rates on hold. Stronger oil prices today as Saudi minister commits to further cuts could help C$ vs US$ and extend its rally. Next key level Jul31st high vs US$, our bias remains to buy US$ dips, as we remain skeptical of longer term C$ strengthening.

Despite positive Euro data and general US$ weakness, positive Brexit news Eur has been unable to rally. Expect Eur to remain contained in its current range until the European Central Bank (ECB) meeting on Thursday, with expectations of further monetary policy stimulus. Eur remains vulnerable to further sell off into the ECB meeting.

GBP vs US$ hit a 5 week high on upbeat UK data and optimism over Brexit. UK parliament to vote on a bill that would force the PM to seek a 3 month extensions to the Oc31st Deadline. UK PM is still pressing for a snap election on Oct 5th, but without a majority in parliament the snap election is unlikely to happen. Expect GBP to remain volatile, but further upside is expected on positive Brexit sentiment. 52 days until Brexit deadline.