Tuesday August 20th, 2019

The US dollar remains strong across the board on expectations of fresh stimulus measures to help curtail a major global economic downturn. Investors also appear to be somewhat positive about the upcoming Sino/US trade talks, which is adding to rising global risk appetite. No key data out today, but watch for comments as Italian PM addresses parliament this morning.

C$ lower vs US$ despite firmer oil prices, the weakness primarily from a general US$ strengthening. Key resistance point at 1.3350, a break could see a retest of highs we saw in Jun19. Canadian CPI out Wednesday. Expect to see hold within its current trading range today, but bias remains to be long US$ on dips.

Eur remains vulnerable despite Germany embarking on stimulus strategy and expectations of ECB cutting rates in September. Political concerns in Italy remains as the PM addresses parliament today and the league party attempts a no confidence vote. A break of key 1.1000 has the potential to see Eur fall to May 07 levels.

GBP remains steady as PM starts a bid to renegotiate Brexit talks on the Irish border. Comments from EU’s Tusk saying PM Johnson offers no “realistic alternatives” to Brexit backstop, isn’t a positive sign. Anticipate of a no confidence vote, possible general election and 2nd referendum will keep GBP vulnerable to market volatility.