Currency Outlook

SEPTEMBER 2019 – IN BRIEF

What happened

  • Wild fluctuation and uncertainty in markets crowned the U.S. Dollar as a safe-haven
  • August came with havoc to equity and bond markets; DJIA had its first loss in 3 months
  • Other central banks exercised easing policies only re-strengthening the buck by 0.5% overall
  • Political battles brewing in the U.K. and Italy sank Euro and Pound to 2017-lows
  • Mexican Peso and Brazilian Real were worst performers as the Amazon and economy burn
  • China and the U.S. sought to take a friendlier tone in the midst of tariff escalation at the G-7 meeting while reassuring world leaders

Tempus’ view

  • Fed could hesitate in lowering interest rates in September, buck likely will swing, but not gain
  • Lack of detail or advancement in trade talks will continue weighing on global markets
  • Elections or a second Brexit referendum in the U.K. could materialize ahead of October
  • Canadian Dollar and Mexican Peso will mount a comeback if USMCA is ratified, oil climbs, trade situation improves
  • Hard to make predictions in a world with daily changes in mood and intentions. As politics and the economy intertwine, normal FX dynamics are adjusting as well as digesting

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