Wednesday July 24th, 2019

US$ traded near a five-week high against most major currencies. With a government borrowing agreement on Monday the U.S. Treasury could increase its short-term borrowing. An increase in U.S. borrowing would cut money in the banking system which is seen favourable for the dollar. US existing home sales fell 1.7% in June vs. 0.2% drop yesterday. Also leading to a stronger dollar is news of trade talks between the U.S. and China to take place next week.

C$ weakened to a near one-month as recent Canadian economic news supported the view that the Bank of Canada could cut interest rates this year. Disappointing wholesale trade and retail sales last week have investors reassessing Bank of Canada’s bank policy.

EUR is trading at a two-month against the dollar this morning, hit by weak German PMI and a possibility the ECB could start easing policy as soon as tomorrow.

GBP slightly higher today after losses in recent days. The market is awaiting the new Prime Minister Boris Johnson’s speech later today for clues on his economic plan and to take the UK out of European Union. Focus will be picks made for prominent positions and into his strategy of how he plans to deliver Brexit by the end of October.