CAD Outperforms as Crude Oil Soars, AUD Down Under on RBA Rate Cut Risk - US Market Open

2019-06-13 12:45:00 Justin McQueen

MARKET DEVELOPMENT –CAD Outperforms as Crude Oil Soars, AUD Down Under on RBA Rate Cut Risk

DailyFX Q2 2019 FX Trading Forecasts

Crude Oil: Brent and WTI crude futures soared throughout the European session, gaining as much as 3% following reports that there has been an incident in the Gulf of Oman, in which two oil tankers had been reportedly attacked, according to Reuters. In turn, the build up of tensions in the Middle East has seen oil prices firmer amid rising geopolitical risk premium. Subsequently, this had spilled into FX markets with the Canadian Dollar the notable outperformer in the G10 space.

GBP: First round of UK leadership contest saw Boris Johnson top the polls by a wide margin at 114 votes, while second and third place went to Jeremy Hunt (43) and Michael Gove (37). In reaction to the result, the Pound had edged lower albeit very marginally as Boris Johnson had a larger than expected number of votes, however, the move had been pared almost immediately.

AUD: The Antipodeans are underperforming this morning and most notably the Australian Dollar following the employment report overnight. While the employment change beat expectations, the gains had largely been driven by part-time work, while the unemployment rate remained at 5.2% vs. Exp. 5.1%. Consequently, given that the relatively weak jobs report, money markets now see a 75% chance of a cut at the July meeting, thus keeping AUDUSD on the backfoot.