The Euro and the Pound Have Recovered Some of the Losses. Waiting for the Bank of Canada Meeting

Investors began to fix positions in the US dollar after a protracted rally. The dollar index (#DX) has moved away from local highs. Weak economic releases put additional pressure on the greenback. Thus, the ISM manufacturing PMI in August amounted to 49.1 instead of the forecasted value of 51.1. Investors are still awaiting further information regarding the escalation of the trade war between the US and China.

Investors' concerns about the "hard" Brexit have become weaker, triggering higher demand for the British pound. The British Prime Minister and Conservative Party Leader, Boris Johnson, lost a majority in the House of Commons yesterday after MP Philip Lee decided to move from conservative to liberal democrats. From now on, the UK government will be a minority cabinet. The official opposed the "hard" Brexit without a deal. The House of Commons of Great Britain supported the introduction of amendments to the agenda of the parliament, which will allow voting to ban the country's exit from the EU without a deal. Boris Johnson himself believes that the bill that does not allow Britain to leave the EU without a deal greatly injures the country. This bill allows Brussels to impose its conditions.

Today, the attention of financial market participants will be directed to a meeting of the Bank of Canada. It is expected that the regulator will maintain the basic parameters of monetary policy at the same level. We recommend paying attention to the comments of the Central Bank representatives.

The "black gold" prices rise after falling the day before. At the moment, WTI crude oil futures are testing the $54.25 per barrel mark. At 23:30 (GMT+3:00) weekly crude oil inventories will be published according to the American Petroleum Institute.

Market indicators

Yesterday, the bearish sentiment was observed in the US stock markets: #SPY (-0.57%), #DIA (-0.80%), #QQQ (-0.97%).

The yield on 10-year US government bonds is consolidating near multi-year lows. At the moment, the indicator is at the level of 1.48-1.49%.

- Composite PMI from Markit in the eurozone at 11:00 (GMT+3:00);
- Composite PMI in the UK at 11:30 (GMT+3:00);
- US trade balance at 15:30 (GMT+3:00);
- A decision of the Bank of Canada at the key interest rate at 17:00 (GMT+3:00);
- The Fed's Beige Book at 21:00 (GMT+3:00).

by JustMarkets, 2019.09.04

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.