Canadian Economic Data Failing to Support the Loonie

Key Movers

The EUR came under renewed downward pressure last week as an escalation in US-China trade tensions reminded markets that the euro area finds itself in a particularly vulnerable position should US-China trade talks collapse. Adding to US-China related uncertainty, the European elections might ignite Euro weakness. The European Parliament election over 23-26 May (the result will be out Sunday evening) looks likely to be a market-relevant event this time. The election result could affect, especially on Italian politics, triggering government changes or further confrontation between EU and Italy, posing a weakening pressure on EUR in the medium term. The pair is currently changing hands at 1.1155 against the Greenback.Over in the UK, the GBP/USD touched a 4-month low of 1.2624 on reports suggesting the UK Prime Minister was going to be resigning by the end of the business day 22nd May after Andrea Leadsom, Leader of the House of Commons resigned over the PM’s Brexit plan and says she no longer believes in the governments approach. It’s fair to say there is chaos within the UK government over Brexit which will keep the Pound under selling pressure.The latest FOMC minutes have indicated a patient approach in setting interest rates in the near-term, and the market's view is that US rates will remain where they are for now.