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By xemarketanalysis September 11, 2019 9:51 am
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    XE Market Analysis: The Canadian Dollar, The Currency Market’s Only Star Performer

    OVERVIEW

    • The plot thickens in the British parliament as there is a strong argument that suspension of proceedings is in fact illegal. The Supreme Court will rule next week.
    • Despite significant tensions in many parts of the world, Central Bank meetings are strangely breezy.
    • The Canadian dollar - a star in the currency galaxy. 

    HIGHLIGHT

    There is a strange lack of urgency or firm directional bias in the market as participants prefer to err on the side of cautious ahead of key event risks: the ECB and US Federal Reserve meetings. There is also little information and fresh development around US-China trade talks though there are signs of a thaw in the frosty relationship.

    USD CAD 10 September 2019 Close 1.31542

    US DOLLAR

    The US economic docket will relatively light today with the release of Producer Price Index (PPI) which may drive the US dollar in short-term. Gold prices remain a touch within the key $1500 zone amidst fading appetite for risky assets. 

    BRITISH POUND

    GBP/USD continues to enjoy a rare sense of calmness in the market, oscillating around the mid-point of the 1.2300s. Currency market participants seem to have moved into a wait and see mode after the UK Parliament adopted a law to avoid a no-deal Brexit and voted against a fresh election. With the House now suspended for the next five weeks, the Pound waits for new announcements Brexit developments. PM Johnson could be the last action hero if he convinces the EU to adopt an alternative plan with no backstop.

    EURO

    The euro is trading near the lower end of the 1.1000-1.1060 range with the main focus on tomorrow’s ECB meeting.  Recent weakening in economic data points indicates that the Eurozone needs a monetary policy reset. Yet, with the next action already priced in, cautiousness is starting to creep into the market: disappointment that stimulus will fall short or not good enough could weigh on the EUR/USD.

    CANADIAN DOLLAR

    Recent economic data has revealed a certain degree of resilience underlying the Canadian economy despite global trade disputes. Yet, it does not imply that the country is totally immune to the ripple effects of anti-trade measures. The loonie keeps a bid tone against the greenback, fetching 76 cents US, a two-month high. USD/CAD is expected to consolidate within narrow ranges with a bias to further downside. 

    AUSTRALIAN DOLLAR

    The Aussie is hanging tough against the greenback and sits around the 0.6800s, as investors are very optimistic that trade talks will resume between the US of A and China. 

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