Wednesday October 16th, 2019

The US$ fell to a one month low verses the major currencies after China criticized the US legislation for its pro-democracy support in Hong Kong. The currency markets responded with the selling of commodity currencies and purchasing safe-haven currencies. IMF commented yesterday that the US/Sino trade war will cut 2019 global growth. The focus remains on the ongoing Sino/US trade talks for direction. Intraday investors will watch the US retail sales data, which is forecast to decline slightly in September.

Oil prices continue to slip on weaker demand for fuel due to slower economic growth and forecasts of increases in US crude inventories. C$ remains within a tight range supported by a weaker US$ vs as strengthening C$. Focus will be on US retail sales and Canadian CPI data out this morning.

Euro continues to trade within a relatively narrow band this last week. Positive Brexit tones should provide some support to the single currency if a deal is achieved. The ongoing Sino/US trade dispute is hampering long term economic growth,  which continues to negatively impact Euro strength.

Positive Brexit tones continue as the  Chief EU Negotiator Barnier expressed optimism about reaching a deal. The UK PM spokesman commented talks overnight were constructive, but added there were still issues that need to be resolved. The GBP rallied on the positive Brexit news and appears to somewhat ignore negative news as investors feel GBP is undervalued longterm. Brexit discussions continue, 15 days to the Brexit deadline.