The euro will be caught in the crossfire between the Brexit vote and ongoing Fed policy sentiment over the next weeks. Overall, expect steady and consolidative in the short term with periods of high volatility.
We anticipate the GBP to be steady to weaker leading up to the Brexit vote. A vote for Brexit will cause the GBP to weaken rapidly with potential global repercussions for interest rates and trade.
Canada will remain captive to the near term direction of energy prices and Fed policy sentiment as the Bank of Canada is on hold indefinitely. The CAD has been supported by the recent rally in oil but most of those benefits may already be priced in.
Global uncertainty will continue to make the JPY a safe haven currency despite poor economic and financial fundamentals. Continued U.S. trade rhetoric leading up to the election will keep the JPY steady to firmer.
Uncertainty regarding the direction of China's economy will keep the AUD contained and potentially pressured. The Reserve Bank of Australia appears to be on hold indefinitely.
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