Monthly Forecast: July 2019

Foreign Exchange - Monthly Forecast
July 2019
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Andrew Kositkun
Andrew Kositkun
Foreign Exchange Analyst
The key event for the USD over the past month has been the dovish shift from the Fed. This development has caused the USD to weaken and has increased expectations for rate cuts as soon as the Fed's meeting this month. While this shift from the Fed represents a dramatic shift in guidance relative to start of the year, there are some reservations on whether this signals broad based dollar weakness moving forward. Read more...
The outlook on the JPY has materially changed since our last currency outlook as a risk adverse backdrop supports flows into safe haven assets such as the JPY. On trade, US-China tensions dominate the headlines, and while the G20 meeting between Presidents Trump and Xi were constructive, uncertainty still remains around the actual ability to achieve a deal and the negative drag from already high tariffs remain. Read more...
In our past currency outlooks, we have been negative on the euro as economic data out of the single marketplace continues to disappoint, trade risks (auto tariffs) with the US remain and Italian uncertainty remains in the background. Read more...
The GBP has spent most of last month drifting lower. This move reflects the market's reassessment of possible Brexit outcomes. With PM May signaling that her premiership will end on June 7, the focus now shifts to the leadership contest to pick the next leader as his or her Brexit philosophy will determine the way forward. Read more...
Canada unfortunately finds itself in the middle of trade tensions from both the US-China trade standoff as well as NAFTA/USMCA ratification risk. Read more...
The AUD has been slowly grinding lower throughout the year and indications are that this trend should continue. Read more...
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