Thursday October 3rd, 2019

Washington moved to impose new tariffs of $7.5bln on European goods as punishment for illegal EU subsidies to Airbus. US$ eased to one week lows vs Eur & Yen after yesterdays disappointing US ADP Non-Far payroll number. Signs that the U.S economy could be slowing has increased investor concerns of another Fed easing. US non-manufacturing PMI data coming out this morning will be watched closely by investors and could impact US$ intraday.

C$ breached its tight trading range yesterday and remains under pressure as oil prices continue to decline. Oil prices weakened as oil supply increased and concerns for global economic growth remain. In the current geopolitical conditions oil prices remain volatile and hard to predict. The prospect of a slowing US economy and lower oil prices will continue to put pressure on C$.

Eur rebounded yesterday from its recent lows vs US$. The Eur rally stalled today after the announcement of new US tariffs on European goods. Investors will watch todays US PMI data and tomorrows Non-Farm Payroll data for direction. The Euro rally is primarily US$ weakness vs positive Eur sentiment and remains vulnerable to further selling.

UK PM submitted his new Brexit plan, dubbed “two borders, four years” to the EU yesterday. The EU hasn’t rejected the plan and the negotiations continue. Despite weaker UK data today, GBP remains stable awaiting the EU’s decision and Brexit next steps. 28 days to Brexit deadline.