US DOLLAR
he NA market opens its session with a deceptive calmness today. Commodity-linked currencies take a breather following a battering triggered by a rout in crude oil futures prices. WTI tanked 6% dragging the NZD to its lowest level since January 2016 whilst dollar-cad jumped to a 2-month high. The recent moves were driven by a combo of the new additional 10% tax on Chinese imports, a re-adjustment of the CNY, chops from central banks and growing concerns of a global economic meltdown. The Dollar Index remains steady and with a light calendar today, we expect currency market to thread the waters cautiously.
CANADIAN DOLLAR
USD/CAD vaulted to its highest level in over 2 months after crude oil prices plunged to a seven-month low. However, the pair lost its momentum and made a swift descent to key long-term technical barrier around the 1.33 figure. WTI crude oil is steady this morning but remains volatile with a negative tilt. Global oil demand could dry up over a slowdown in major economic powerhouses.
EURO
EUR/USD remains inside a consolidation zone around the 1.1200 amidst relative market calmness. All eyes are cast on the ongoing trade tensions between China and the US – with hope that the parties will resume official talks and the CNY. New tariff on Chinese products was swiftly followed by a retaliatory re-adjustment of the yuan. The Eurozone itself is not faring any better with marked slowdown in the German economy. The pair is expected to be driven by global market mood in the absence of local data.
BRITISH POUND
GBP/USD was unable to sustain its overnight bearish rebound with the pair now declining towards the lower end of 1.21. There has been no progress in Brexit talks between the UK and the EU, each side waiting for the other to see who bats the eyelids first. Market is enjoying a temporary calmness ahead of tomorrow’s GDP report.
JAPANESE YEN
The Japanese Yen continue to bask in the sun of safety-haven status, firming below the 106 post. Recent actions from central banks have prompted investors to review and readjust their positions over growing concerns of a global economic meltdown. The economic slate is light, and GDP report out of Japan later in the day is unlikely to move the needle.
