Global Themes

Euro fell from short term highs near 1.1800 on Brexit angst as several ministers resigned, and dragged EUR lower with it. Short term range still within 1.1508-1.1853 according to Reuters. Germany will release Zew data later today.

Spot traded higher as US equities rallied, perhaps market is not overly concerned on trade war yet. May high 111.40 is the next resistance here.

Sterling pared back gains above 1.3300 after several key ministers, including Boris Johnson quit after PM May’s somewhat soft Brexit plans are agreed upon by the Cabinet over the weekend. The resignations dragged Sterling lower by more than 100 pips as market lowered rate hike expectations in Aug from 67% to 58%. Short term support at 1.3195.

USDCAD is off the 4 week lows as we approach BoC meeting tomorrow. Despite a hike is nearly fully priced in, market fears this will be a “dovish hike” and the forward guidance will be more conservative due to impact from trade war.

Bounce in commodities and equities helped AUD higher and broke some short term caps. Strong resistance at 0.7503 according to Reuters, and likely to be tested if the positive risk sentiment persists.

CNH Spot lower as risk sentiment recovered overnight, perhaps on some talks of exemption on tariffs, the break of 50% Fibo level at 6.6118 maybe bad news for the bulls.

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