June 2019





  • “When will the period of USD strength come to an end? The answer to that question will depend on the timeline for the resumption of trade talks between the U.S. and China. The global investor community will be hoping the two superpowers can come to an agreement at the G-20 meeting on June 28-29. If a deal is not possible, the greenback will remain strong for longer, more so if the Federal Reserve doesnot deliver the rate cuts that markets are currently expecting.”

  • “The extension of loose monetary policy by the European Central Bank and threat of U.S. tariffs on goods from the European Union do not bode well for the euro. We have trimmed our EURUSD targets accordingly.”

  • “The Canadian economy is on the mend as evidenced by the strong handoff from March which signals an acceleration of growth in Q2. That, coupled with the removal of tariffs by the U.S. on steel and aluminum imports from Canada, should have given a lift to the Canadian dollar which instead continues to struggle amid investor concerns about global growth. While we’ve left unchanged our end-of-year target of 1.30 for USDCAD, expecting a U.S.-China trade deal to breathe new life into oil prices and hence the Canadian currency, we may have to revise that forecast ifJune’s G-20 meeting fails to alter the current toxic tone in trade negotiations between the U.S. and its trade partners.”

***This extract from Economics and Strategy, Highlights, National Bank, Financial Market, June 2019.

Stéfane Marion

Chief Economist andStrategist

Krishen Rangasamy

Senior Economist

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