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By xemarketanalysis September 9, 2019 11:20 am
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    Currency Market Analysis: The USD Has a Case of the Mondays as Loonie Lifts and Pound Perky

    OVERVIEW

    • There are no significant data announcements today, so today should be quiet in currency markets   
      ​The greenback is lower on last week's lower-than-expected job growth in the US
      
      The GBP is climbing despite a Parliamentary proroguation and scant chance EU leaders will agree to another Brexit delay  

    HIGHLIGHT

    Across the Atlantic, it will be a pivotal week for the British Pound: British Parliament is set to be prorogued with a scheduled return on Monday 14th. The six-week-old UK government is facing in-party and outside opposition, pressures to back down from a no-deal exit strategy. The Euro waits for ECB’s decision this Thursday. The central bank is likely to announce a new series of stimulus packages to try to pull the Bloc out of the economic morass. We should expect a quiet Monday in the absence of major data releases.

    GBP USD 09-09-2019 Close 1.23425

    US DOLLAR

    It was a rough beginning of September for the greenback with the US dollar index closing in the negative territory. Employment report missed market estimates on Friday sending the greenback lower against most G-10 currencies

    BRITISH POUND

    GBP/USD printed a new high above 1.2350, buoyed by fresh optimism over Brexit and a return to growth in the services sector. The UK GDP expanded by 0.3% in July, supported by broad-based gains except for agriculture. Just recently, immensely popular and charismatic Speaker of the House, John Bercow announced his intention to step down from his position on October 31st. 

    The three month-growth was, however, flat after contracting 0.2% in Q2. The cable is expected to enter the transition phase as market participants focus on the deliberations at Westminster. Today, the Benn-Burt Bill is expected to become a law, thereby forcing the government to either secure a new withdrawal agreement with the EU or seek an extension for a further four months. The Johnson Government is, on the other hand, likely to call for a fresh general election.

    EURO

    The Euro continues to march higher amidst broad-based US dollar weakness. EUR/USD is trading 0.3% higher around the mid-point of1.1050. The Sentix survey revealed a slight improvement in the economic situation in Eurozone. The index, at minus 11/1, however, points to recession risks for the area. We expect the pair to move into a consolidation phase ahead of ECB announcement (Thursday).

    CANADIAN DOLLAR

    The Canadian economy surprised the market after job reports showed employment rose by 81k in August, albeit mostly fuelled by part-time jobs. USD/CAD now sits near a six-week low. Risk-on appetite has returned following positive comments on trade relations between China and the US. The economic calendar is light today and so we expect the pair to trade along with the general market sentiment.

    AUSTRALIAN DOLLAR

    The Australian Dollar is holding tight to month-long highs and is trading just above 0.6865.

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