As geopolitical tensions between the East and West rise, sanctions and souring relations could have lasting impacts on business globally.
• Canadian dollar stalls ahead of employment data
• Hopes of US-China trade progress limit US dollar
Political developments set to drive further pound volatility
The pound remained on a positive footing against its rivals as MPs continued to push ahead with efforts to remove the risk of a no-deal Brexit.
With an imminent snap general election also seemingly off the table GBP exchange rates were driven to monthly highs.
However, as UK politics remain in a volatile state the pound may struggle to hold onto this bullishness for long.
Unless the odds of the EU granting a fresh extension to the Brexit deadline increase, GBP exchange rates could shed some of their gains today.
Higher Canadian employment forecast to boost CAD
With the Bank of Canada (BOC) looking set to leave interest rates on hold in the near future the appeal of the Canadian dollar has improved.
CAD exchange rates could gain additional ground this afternoon if August’s employment data points towards a tightening labour market.
As the net change in employment is forecast to show a solid rebound on the month, with an increase of 20,000, the Canadian Dollar could find a fresh rallying point.
However, if the labour market fails to show signs of strengthening this could undermine confidence in the outlook of the Canadian economy.
US dollar braces for non-farm payrolls report
As market risk appetite picked up on the prospect of fresh US-China trade talks the US dollar lost some ground.
Even so, as August’s ADP employment change figure showed a strong increase of 195,000 on the month confidence in the health of the US labour market improved.
If this afternoon’s non-farm payrolls report shows a similar improvement this may see USD exchange rates making solid gains.
A tighter labour market would offer the Federal Reserve incentive to leave interest rates on hold for longer, to the benefit of the US dollar.
Today's key market data
13:30 - CAD - Net Change in Employment
13:30 - USD - Change in Non-Farm Payrolls
Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure
Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)