Wednesday October 2nd, 2019

US$ rebounded overnight after its rapid sell off yesterday related to the disappointing U.S manufacturing data (decade low). Investors brushed off the weak data focusing on the US’s relatively strong economy, the focus has shifted to Fridays Non-Farm payroll for direction. Aud rebounded from its 10 year low and NZD from its 4 year low mostly on the back of weaker US$. US impeachment enquiry continues to pick up pace, but its impact on the markets has been minimal so far. US ADP employment data out today may impact US$ if it’s outside expectations.

C$ remains trapped within it’s current trading range. Oil prices were steady overnight. Investors are sitting on the sidelines waiting for Sino/US trade talks direction & the Canadian elections to end. US crude data out this morning may provide some direction for C$ today.

Eur’s rally yesterday was predicated on a weaker US$ scenario vs EUR strengthening. Markets opened with EUR retesting its recent lows and remaining vulnerable to further sell off. Investors are waiting for the expected Brexit ultimatum from the UK and the EU’s response.

UK PM presents the ‘Final Brexit Offer’ to EU officials today, saying if it’s not accepted Britain will stop further talks and leave on Oct 31st. The outcome of Brexit is far from certain, but in all probability the UK will be heading to elections. Brexit uncertainty put pressure on GBP falling 1/2% and the currency remains vulnerable to further weakness. 29 days to Brexit deadline.