Thursday 20th June, 2019

A busy day for US$ which had its 2nd largest single day sell-off of 2019 on the back of Fed comments. The FED’s dovish rate comments signaling the likelihood of a rate cut as early as July. Oil rallied 3% on reports Iran had shot down a US drone. In the UK the conservative party will be holding two ballots today, narrowing the leadership race down to two candidates.

C$ benefited from strong Canadian inflation numbers Wednesday, the prospect of FED easing and the spike in oil prices overnight. The potential to see US$ continue to weaken against C$ remains in place with Oil prices strengthening. A retest of Feb19 US$ lows is possible, but we remain cautious until we see a resolution of the US/China trade issue. Take advantage of any C$ rallies to stage into buying US$ on dips.

Eur rallied almost 1% vs US$, its biggest gain since Jan19. The move is US$ weakness story vs EUR strengthening, with political/economic concerns remaining our bias is look for sell EUR opportunities.

Boris Johnson remains the front runner in the PM leadership race. We are approaching the end of the leadership process and the candidates will be expect to provide more details on Brexit strategies. In the short term GBP remains vulnerable to price swings until the PM race is completed.