EncoreFX’s daily market updates are written by our experienced and professional dealing team.
Euro Struggles on German Political Risk; USD/CAD Stable at Start of Week
Published November 20, 2017
The euro remains mixed this morning after political developments out of Germany weighed on the multi-national currency. German Chancellor Angela Merkel suffered a setback in forming a majority government after a coalition partner unexpectedly pulled out of talks.
Merkel started on a weak foot in the coalition talks as her party won a reduced number of seats during this year’s election; the Chancellor can now form a minority government with the Green Party of Germany or face a new election if a coalition is not created.
USD/CAD remains in the high 1.2700s this morning as the market continues to look for developments on US tax reform. Investors do not expect a great deal of progress on the bill as the US has a shortened week ahead of the Thanksgiving holiday.
US President Trump continues to attempt to rally support around the bill as it moves on to the Senate for discussion; the legislation faces a tough fight here, as the Republicans can only afford to lose two votes.
The current round of NAFTA talks are set to wrap up this week in Mexico City as the three members continue talks on the 23-year old agreement. Canada and Mexico are set to offer rebuttals to the US over tougher automotive content rules.
Oil prices are weaker this morning; doubts have arisen on whether that the OPEC-led coalition will extend their cut agreement during their meeting at end of this month. US oil output continues to rebound as production levels are up nearly 15% from the lows of mid-2016.