For now, Australian Dollar remains the strongest one for today as supported by solid GDP data. Euro and Canadian Dollar are racing for the second strongest one. But there is actually much hesitation in the Loonie. There were talks that Treasury Secretary Steven Mnuchin urged Trump to waive steel tariffs on Canada. But then there was also report by the Washington Post (!?) that Trump is going to confront Canada further by imposing additional tariffs. We usually don’t buy into any rumors in the current post-truth world. But Canadian Dollar’s lack of direction is a reflection of the vulnerable sentiments on the currencies. Adding to that, WTI crude oil is back under pressure and it’s back pressing 64.5 now.
The strength in Euro is much more solid. It’s from a trustable authority in ECB chief economic Peter Praet that policy makers are going to debate end of asset purchase program next week. The news took German 10 year bund yield higher to above 0.46 today, up more than 0.09. There is still some room for rally in bund yield before it hits the key level at 0.50. EUR/JPY has indeed broken equivalent level at 128.94 already. EUR/JPY’s could be a prelude to further rise in bund yields. Or it could be just a reflection of surge in US 10 year yield too. We’ll see.
