Daily Market Update

Brexit Delayed Until Halloween; Loonie Down on Oil

April 11, 2019

A busy news day yesterday was not enough to move the dollar out of its familiar ranges against most of its counterparts.

Overview

The Bloomberg Dollar Spot Index has held a 0.3% range over the past two days.

Yesterday’s Federal Reserve meeting minutes were dovish, which was widely expected.  A number of members indicated they see additional headwinds for the economy and agreed that rates should stay on hold for the medium-term.  Cooling inflation pressures have also helped their argument. Although this morning’s producer price index did show a slight uptick in price pressure, contrasting with yesterday’s low consumer price index.  There are four Fed speakers on today’s docket and Minneapolis Fed President Neel Kashkari will hold a question and answer session on Twitter this afternoon.

 

What to Watch Today…

  • Numerous Fed Speakers today

Complete Economic Calendar can be found here.

 

CAD

The Canadian dollar is under pressure this morning as the price of oil is on the retreat.  CAD one-month implied volatility fell to the lowest in five years.  The price of oil fell from its highest level in five years after a report showed that U.S. crude inventories increased.

The loonie wasn’t the only commodity-based currency under pressure.  The Australian dollar was lower after Prime Minister Scoot Morrison called a general election for May 18th.

GBP

The British pound continues to put currency traders to sleep.  GBP/USD volatility has been falling since December and is now at the lowest points since last summer as the U.K. avoided crashing out of the EU this Friday.  European leaders granted the U.K. an extension until October 31st to strike a deal to leave the E.U.  The extension is months longer than what PM Theresa May requested and will force the U.K. to take part in EU Parliamentary elections.  The long delay also slightly increases the chance that Brexit could be cancelled altogether.  Indeed, European Council President Donald Tusk noted that “Until the end of this period, the UK will also have the possibility to cancel Brexit.”

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