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Greenback stable on trade de-escalation with all eyes on CPI

Currency-Market-Update-Monday-1
Albert Edwards
by Albert Edwards on November 11, 2019

CURRENCY MARKET UPDATE

U.S. Dollar highlights:

USD remains firm after the world’s two biggest economies agreed last week to roll back tariffs as another truce; however, President Trump has a different view. Markets are still supporting USD with safe-haven status as reduced tensions eliminates the risk to global growth. Federal Reserve Chairman Jerome Powell speaks on Wednesday after October’s inflation report and markets will be monitoring if he remains dovish; Producer Prices available Thursday; and Retail Sales for last month available Friday.

Canadian dollar highlights:

CAD remains vulnerable due to contradicting trade developments and fluctuating oil prices. Any doubts that a trade deal will be finalized will affect CAD weaker so markets remain optimistic Presidents Xi and Trump will continue to ease tensions. Meanwhile, the unemployment rate for October remained at 5.5% (as expected and same as September). However, nearly 2K jobs were lost (versus 15K expected). Building permits and housing stats dropped. All eyes on central bank Governor Stephen Poloz’s speech on Friday.

Euro highlights:

EUR weaker after Spain had its fourth election in four years over the weekend. Increased Brexit uncertainty keeping EUR defensive as the new deadline is January 31, 2020. The European Central Bank will remain with their current monetary policy until economic conditions improve; however, markets are pricing another rate cut for 2020. All eyes on the GDP Growth Rate for Q3 available Thursday and October Consumer Prices available Friday.

British pound highlights:

GBP remains vulnerable and defensive ahead of the election next month. Geopolitical news, Brexit uncertainty, and increased tensions in parliament are all affecting GBP weaker and slowing the economy. All eyes on September GDP and unemployment rate (available today and tomorrow); Producer and Consumer Prices for October available Wednesday; and Retail Sales on Friday.