Thursday August 29th, 2019

Positive comments  from both the US Treasury Secretary and Chinese Commerce ministry, that discussions are underway to set the next round of trade talks. At the same time US Administration announced the official collection of 15% tariffs will begin on September 1st. Safe-haven currencies continued to firm with investors apprehensive about the trade talks and the Chinese Yuan remains on course for its worst month since 1994. The markets will focus on US GDP data out this morning for intraday direction.

C$ has failed to rally despite firmer oil prices after the sharp fall in US inventories last week. Ongoing Sino/US trade concerns and growing speculation of a BOC rate cut has tempered investors appetite for the loonie. Canadian 2nd quarter current account out this morning, but expect C$ to continue within its current trading band today.

Italian president gives the mandate to form a new government averting the need for fresh elections. Eur continues to trade within its existing trading range, but a break of 1.1025 vs US$ could see further selloff to 1.0854 (may2017). German Inflation and employment data out this morning will provide direction for the currency today.

GBP remains under-pressure after UK PM suspended parliament, leaving the opposition party little time to seek an emergency debate on Brexit and pass legislation to block no-deal Brexit. With just 63 days to go before Brexit deadline, expect GBP to remain vulnerable to further weakness as the political saga unfolds.