The U.S. dollar slides to the lowest levels in three months as Brexit optimism lifts pound and European equities.
Kathryn Garvey | October 21, 2019
Positive moves coming out of the UK pushed the pound to $1.30 as Boris Johnson attempts to get lawmakers to agree on a withdrawal agreement. The euro followed the pound higher. Canadian elections take place today as Liberal Justin Trudeau faces Conservative Andrew Scheer.
ECONOMIC DATA RELEASES:
Tuesday: US Existing Home Sales
Wednesday: Japan PMI, EC Consumer Confidence
Thursday: US Initial Jobless Claims, ECB rate decision, US Durable Goods, US New Home Sales
Friday: German IFO Business Climate, Univ. of Michigan Sentiment
October 21, 2019
EUR/USD 1.1155 GBP/USD 1.2991 USD/CAD 1.3108 AUD/USD 0.6874 USD/JPY 108.50 USD/CNH 7.0665 USD/ILS 3.5386 USD/MXN 19.1350 USD/CHF 0.9850 USD/INR 71.1500
The greenback is broadly lower versus G-10 peers, falling to its lowest level since July. Another possible rate cut in October has boosted risk appetite. No Fed speakers are scheduled this week in advance of the October 30 FOMC decision. Positive comments made by China’s top negotiator on the trade front has boosted global equities.GBP
PM Boris Johnson’s first attempt to pass a Brexit deal through Parliament on Saturday failed – 322 against to 306 in favor. Today, he will try again to get UK lawmakers to agree in principle to the agreement, while the government will attempt to fast-track legislation. Johnson has asked European lawmakers for an extension through January 2020. Optimism on the deal sent the pound to $1.30 this morning.EUR
The euro is slightly higher this morning boosted by dollar weakness. The pair remains focused on risk trends with upbeat Brexit optimism providing a lift to the currency. PMIs and the ECB meeting this week will provide further direction.CAD
The loonie hit its strongest levels since July today after falling for a third straight session amid broad dollar weakness. Canadians head to the polls today as incumbent PM Justin Trudeau faces off versus Conservative Andrew Scheer. FX players will turn attention to BoC outlook after the election passes.ASIA/PACIFIC
The yen is trading lower today following a rally in global treasury yields. The BoJ is considering additional stimulus to achieve its 2% inflation target.
China’s Vice Premier Liu said that China will work with the US to resolve the core issues of the trade war and that a deal would benefit both sides of the world. These comments came at the same time PBoC Governor Yi Gang emphasized that a primary focus is to keep debt under control. Two policy meetings in the coming weeks will focus on how to keep China’s growth at or around 6%.
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