Dollar weak as traders await Saturday’s historic Brexit vote by Parliament
Scott Petruska, CFA " | October 18, 2019
October’s sell-off in the dollar continued, as the index approaches its weakest level since July. Traders await Saturday’s UK Parliament Brexit vote where there is no clear outcome. Tariffs on EU goods take effect today. China’s economy grew at the slowest pace in more than 27 years.
October 18, 2019
EUR/USD 1.1143 GBP/USD 1.2883 USD/CAD 1.3137 AUD/USD 0.6849 USD/JPY 108.50 USD/CNH 7.0767 USD/ILS 3.5429 USD/MXN 19.1801 USD/CHF 0.9876 USD/INR 71.1475
The dollar downtrend in October remains intact as the index approaches its lowest levels since July. Liquidity is tightening up as traders await the Brexit vote on Saturday, which may impact all markets.GBP
The UK pound was range-bound overnight, yet is poised for a third week of gains. Traders await Parliament's vote Saturday on PM Boris Johnson’s deal with the EU, while markets prepare for a potentially volatile beginning late Sunday when Asian markets open.EUR
The euro is playing catch-up with the pound’s recent surge, and now approaches three-month highs. There is little eurozone economic data on the docket today. US tariffs take effect today on specialty EU agriculture/food products, like French wine, Italian cheese and Spanish olives.CAD
The Canadian dollar moved little overnight as we approach Canada’s October 21 general election. Election results are uncertain, and it’s doubtful that any party will be able to form a majority government. Economic impacts from the election are decidedly unclear, and traders are becoming increasingly pessimistic.ASIA/PACIFIC
The Chinese yuan weakened slightly following release of China’s Q3 GDP data. GDP growth of 6.0% met expectations, but more importantly, it did not drop below 6%. A more negative view on global trade will follow a drop below 6%, which traders expect to see next year.
The Australian dollar hit fresh one-month highs, despite China’s weak GDP. Traders continued to unwind overly short positions following recent strong Aussie job data.