Tuesday September 17th, 2019

US dollar firms vs major currencies as investors remain cautious over rising Middle East tensions and the FOMC rate decision tomorrow. US/China will restart trade talks at the end of this week, whilst US/Japan announced they have worked out an initial trade accord. FOMC and Middle East risk will dominate market focus today.

Oil prices eased after the market assessed global supply capabilities, but the threat of a military response remains. C$ is relatively static considering the volatility in oil prices. The Saudi oil minister’s speech today may provide some direction for oil and have a knock on effect to C$. Key data tomorrow is Canadian CPI and the FOMC rate decision.

Mixed German ZEW survey data today had little impact on Eur. The rising Middle East tensions, ongoing Brexit and the possibility of US tariffs on the EU subsidies of Airbus is weighing on the currency. Eur remains vulnerable to another attempt to of its recent lows, possibly extending towards 1.0810 vs US$.

UK PM is sticking to his pledge to take Britain out of the EU by oct 31, vowing not to seek an extension to the deadline. UK Supreme Court hearings on PM Johnson’s Parliament suspension gets underway. GBP eases vs US$ but remains remarkably resilient considering the political battles underway over Brexit. A break of 1.2500 may prove difficult in the short term.