Global stocks gained and bond prices rallied, dollar lower
July 3, 2019
Stock markets advanced and bond prices extended gains ahead of the Fourth of July holiday. The dollar is trading lower as investors are reacting to Trump’s nomination of two dovish candidates to the Fed Board and to EU leaders’ nomination of Christine Lagarde to replace departing ECB president Mario Draghi, who is expected to take up his stratagem of providing stimulus. US stock and bond markets will close early today and remain shut tomorrow for the Independence Day holiday.
July 3, 2019
EUR/USD 1.1290 GBP/USD 1.2585 USD/CAD 1.3076 AUD/USD 0.7027 USD/JPY 107.79 USD/CNH 6.8868 USD/ILS 3.5689 USD/MXN 19.0397 USD/CHF 0.9850 USD/INR 68.8963
The dollar moved slightly lower overnight in light trading. Investors are weighing Trump’s nomination to the Fed Board of two dovish candidates. The US trade deficit rose to a 5-month high on rising imports, particularly from Mexico and China.GBP
The UK pound moved lower following news of the EU nominations for its key leadership jobs. Such strong candidates suggest that the next UK prime minister will not be able to win concessions from the EU ahead of the Brexit deadline on October 31.EUR
The EUR trades below $1.13 after a light day of trading and within a relatively narrow range. EU leadership nominated the head of the IMF, Christine Lagarde, to the position of president of the ECB, a decision that was well received by investors.CAD
The Canadian dollar rallied after Canada unexpectedly posted a merchandise trade surplus, only its second surplus since 2016. The achievement was due to record exports to the US. The USD/CAD quickly fell below C$1.31- the CAD is the best performing currency from yesterday’s close.ASIA/PACIFIC
Within its role as a safe haven currency, the Japanese yen made good gains overnight. The Chinese yuan barely moved.
The Australian dollar continues to climb, trading comfortably above $0.70 and reaching two month highs.