FX & market recap:
It seems as if there is nowhere to hide for the dollar, with the currency continuing its broad-based weakness. The Fed-induced narrative of lower nominal and real rates for longer has (a) taken away any prospects of upside potential from the dollar; and (b) allows investors to rotate into investment opportunities elsewhere. We expect US Aug ISM Manufacturing to remain largely stable today, suggesting little potential to change the current trend of USD softness.
As we go to press, USD/CAD has broken below 1.3020, opening the 2019 low at 1.2952 as the next level to watch on the downside. Meanwhile, resistance stands at 1.3105, with a daily close above 1.3219 required for a trend reversal.