Good morning,

Yesterday proved to be a slightly calmer day with today expected to be much more of the same, presenting a good opportunity for fixing trade requirements in the lead up to the volatile end of the week.

The dollar has started the week strong off the high of elevated employment data, providing a branch for the dollar to hang on for now, with the market pricing in a more modest 25 basis point cut from the Federal Reserve, down from the previous expected 50.

Tomorrow the Federal Reserve Chairman, Jerome Powell, will begin the two day discussion on the monetary policy in the US. The market is expecting the continuation of a dovish sentiment and it’s certain that Trump will be watching very closely. His concerns of a strong dollar are no secret.

The pound remains sluggish, with investors hesitant to commit much to the currency under Boris Johnson’s leadership. There is now a proposed legislation to stop the next Prime Minister suspending parliament, therefore forcing a no-deal break may give some early life today, but, as it stands, leading into the end of the quarter the pound will find itself in the tricky territory to establish itself.

The euro remained uninspired with lacklustre data yesterday and further central bank dovishness, holding the EURUSD around the 1.12 mark. The consideration for restarting the quantitative easing program adds weight to the already heavy euro.

Wednesday will see the markets liven up. The Canadian dollar sits strong going into the central bank interest rate decision, with an expected policy easing of 22 basis points over the next 12 months in comparison to 90 in the US.

The UK will release GDP figures, and, of course, the FOMC minutes will guide the dollar’s direction.

Have a great day.

Author: Ross Hammond, Corporate Account Manager