Currency market crawls into the month of June, plagued with fear of escalating global trade tensions. Commodity currencies are making rare gains today, riding mainly on the back of better performance in the oil futures market. WTI is up nearly 2.5% after seeing a complete of 17% last month. The general market sentiment is heavily tilted to cautious amidst lingering trade dispute between the US and China. The US Administration has extended the deadline to hike tariff from 10% to 25% on Chinese imports from June 1st to June 15th.  Markets will be closely watching the next move in US 10-year Treasury yield as it approaches psychological 2% mark.

CANADIAN DOLLAR
USD/CAD continues its southbound move from last Friday, trading 0.15% lower this morning. A revival in the crude oil is extending temporary relief to the Canadian loonie, pushing it below the 1.35 handle. The CAD has been under pressure due to global trade tensions, closing in negative territory for the fourth consecutive month. Market will keep an eye on the manufacturing PMI for further trading action.

EURO
The Euro is trading higher this morning, 0.30% up with the greenback trading lower across the board. The EUR/USD pair seems to largely ignore manufacturing PMI report. The Index at 47.7, showed the sector continues to contract for the fourth consecutive month. Investment within the industry remains low. However, there is a slight hint of optimism with slightly slower decline in new orders and output components. Any further gains are however expected to remain capped around the 1.12 handle.

BRITISH POUND
GBP/USD is oscillating around the 1.26 handle, after the UK Manufacturing PMI pointed to contraction. The latest reading came at a 34-monht low with both new orders and employment declining. Businesses are finding it hard to attract clients – both locally and internationally.  The Pound is expected to continue to trade with a negative sentiment as we move into the first session of the month.

JAPANESE YEN
The greenback is making a timid recovery after crashing to a four month low as week. Fear of escalating trade tensions on multiple fronts and rising geopolitical risks contributed to a 3% surge of the Japanese yen against the greenback last month. Investors conveniently ignored soft domestic Nikkei Manufacturing PMI. The indicator at 49.80 moved into contraction zone, new orders slipping further for a fifth month. USD/JPY is expected to move with overall market sentiment.