We suspected it might be the case, and as post-holiday trading conditions resume, we’re seeing a reversal of flow with healthy profit-taking on long US dollar exposure. A story from the Washington Post is also gaining attention and potentially factoring into the flow. It was reported that President-elect Trump may be considering a universal tariff plan, less focused on singling out specific economies like the Eurozone and Canada.
Another source of Euro demand on Monday comes from the data front, where the latest PMI readings have exceeded expectations, along with hotter German inflation figures. Additionally, the recovering Canadian dollar could be benefiting from speculation that Prime Minister Trudeau might announce his resignation. Support for the Prime Minister has been poor, and the news is clearly bringing some comfort to Canadians.
Earlier today, risk assets received a boost from solid PMI readings out of China. Looking ahead, we have Canada and US PMI data and US factory orders on the calendar.
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