News & Analysis
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USDJPY pair has remained broadly range-bound after central banks aggressively intervened to stabilise financial markets. Looking forward, our FX market analysts expect the yen to continue trending to the upside against the dollar, while the trading ranges remain tight.
Our FX Analysts discuss how sterling is likely to rally with the rest of the G10 against the US dollar as the global economy undergoes a gradual and inconsistent re-opening.
Canada day on Wednesday and a US holiday today means an extended holiday for most in North America this week, which could potentially cause a quiet afternoon session in markets.
The loonie is struggling to break out this morning, toying with marginal losses and gains in the early hours, potentially on the news that California and New York are reversing re-opening measures, leading to a more prolonged recovery for the US economy.
The loonie made a stark U-turn in yesterday’s session to finish the session in the green as the US dollar broadly sold-off once the new Covid case count was released.
The relative accuracy of the median forecast and the positive advanced Canadian May GDP reading, meant that the currency market passed the release by in a risk-off session that would have lapped up a negative surprise.
The loonie made minor inroads against a softening USD yesterday, but all progress has been unwound in this morning’s session as the greenback fights back in a heightened risk climate.
If the US economy underperforms its global peers in Q3 due to a severe domestic second wave, will the dollar continue to strengthen on haven demand? With FOMC minutes and US jobs data out this week markets will have plenty of impetus to ponder the question.
The main focus for USDCAD investors this week will be the reading of April’s GDP due to be released at 13:30BST on Tuesday. This data point is likely to display the depth of the Canadian economy’s contraction.
The domestic US Covid-19 situation has clearly deteriorated this week, with new cases increasing on average across the nation and several states showing signs of severe outbreaks that may threaten to pressure healthcare systems.