Increasing prospect of an interest rate cut by the FED saw investors selling off US$, which fell to a 3 week low. Growth concerns also saw further selloff in oil, which dropped to Jan19 levels. Yen rallied to 5 month highs becoming the safe-haven currency of choice.
US$ fell to a two week low vs C$, but C$ failed to extend further with falling oil prices and continued concern over USMCA as Mexico faces tariffs. C$ remains vulnerable under the current trade tensions, look to buy US$ on dips.
Euro rallied against US$ more on US$ weakness than Euro strength. Lower than expected inflation numbers in the Eurozone in May stalled the rally. In the short term this is a US$ weakness story and eyes will be on FED chairmans speech for direction.
The prospect that a Eurosceptic PM could replace PM May and increasing the chance of a “No Deal” Brexit continues to weigh on GBP. Expect GBP to remain vulnerable to negative swings until the PM successor is named and the Brexit strategy is articulated.