CAD is weaker this morning, falling to 0.75 cents, on worries over US-China trade talks. It should find support near this level today, but expect further weakness going forward. Commodities and equities are down globally as China reports the slowest growth in 30 years at 6.6%. This is a strong number for Western countries, but China needs higher growth to absorb, and utilize, its huge amount of leveraged capital investments. The IMF is also predicting slightly weaker global growth for the next year due trade disputes and rising interest rates.
Prime Minister May has tabled a Brexit Plan B, which isn’t much different than the previous Brexit that was voted down in Parliament. There are many different alternative plans being proposed by various party members, including an extension to the March 29th leave date, or a second referendum. Despite this confusion, or because of it, EUR continues to weaken relative to Sterling. This is the fifth time in the last three months EUR has tested these lows.
The US will report December Existing Home Sales today. Expectations are for 5.25 million, which is down slightly from previous numbers, but not recessionary.