Good morning,

The US Dollar strength as of late may be coming under pressure. US President, Donald Trump, met with the Federal Reserve Chairman yesterday to discuss the economy and the scope of the Dollar in the face of the monetary policy outlook. It is no surprise that Trump would voice his dissatisfaction around the higher US interest rate in comparison to those around it, however there may be some underlying Fed actions that could cause the Dollar to turn around.

Whilst the Federal Reserve continues to pump Dollars into the market, this addition of liquidity risks a heavier weighted supply for the Dollar. Combined with a potential diminishing demand, should US/China discussions continue in a positive direction and therefore drive a desire for riskier assets, this may result in an oversupply of the USD. The EUR stands to gain well from this scenario and so will be one to watch closely, particularly in tandem with how the EU chooses to support its economy.

On the Brexit radar, following yesterday’s supportive environment for the pound, we will see Johnson and Corbyn take part in a live debate today. With polls indicating a narrowing chance for a Labour victory, Corbyn will also be considering his plan of action in the event of a hung parliament outcome and a formation of a minority Government.

Market movement has overall been pretty subdued and will likely remain tentative until we get closer to the election and an expected increase in volatility.

Have a great day.

Ross Hammond, Senior Corporate Account Manager