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CAD

Calm Returns as French Election Ends in Stalemate

Foreign exchange rates are settling into narrower trading ranges this morning as political risks ebb and the dollar’s retreat continues. The euro is modestly lower after an alliance of left-wing parties achieved a stunning upset in the French election, making a “hung parliament” – in which no single group can dominate the legislative agenda – the most probable outcome. Defying polls that showed Marine le Pen’s Rassemblement National on track toward gaining the biggest delegation in the National Assembly, Jean-Luc Mélenchon’s Socialist Nouveau Front Populaire is leading with 182 seats, with most constituencies counted, followed by President Emmanuel Macron’s Ensemble...

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Disappointing Jobs Numbers Drive Yields Lower

US labour markets slowed more than expected in June, bolstering market odds on a rate cut from the Federal Reserve by September. On the headline level, the print was positive: according to data released by the Bureau of Labor Statistics, 206,000 jobs were added in the month, topping the 189,000 consensus forecast, and remaining well above the 120,000 that is generally believed sufficient to mechanically offset net growth in the labour force. Average hourly earnings climbed 0.3 percent month-over-month, down from 0.4 percent in the prior month, and were up 3.9 percent year-over-year. However, revisions to prior months saw overall...

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Dollar Falls As Payrolls Loom

The dollar is retreating and global stock markets are marching toward record highs ahead of a non-farm payrolls report that is expected to show US labour markets softening, helping set the stage for a rate cut from the Federal Reserve by the early autumn. The British pound is adding to its gains after Keir Starmer’s Labour Party absolutely crushed its Conservative opponents in yesterday’s British election, taking at least 410 seats in the 650-seat House of Commons. Traders expect Starmer’s government to usher in a period of relative political calm after 14 years of volatile Tory rule, with higher levels...

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US payrolls in focus

• US holiday. Quiet trading with the US shut for Independence Day. European equities, yields, & EUR higher on the back of easing French political risks.• AUD upswing. Softer USD & relative macro trends supporting the AUD. AUD/USD near the top of the range it has occupied since early-January.• US jobs. US non-farm payrolls released tonight. Signs the US jobs market is cooling could bolster Fed rate cut expectations which would drag on the USD. With the US markets shut for Independence Day it was relatively quiet overnight. There was a bit of a ‘risk on’ vibe in European trading...

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Price Action Cools As Barbecues Heat Up

Price action is turning choppy in financial markets this morning as liquidity begins to evaporate ahead of tomorrow’s July 4 holiday. Equity futures are flat ahead of a shortened trading session, fixed-income markets are seeing modest safe-haven flows, and commodities are range-bound as thinly-manned trading desks take risk off the table before Friday’s non-farm payrolls report. The dollar and Treasury yields retraced some of their post-presidential debate gains yesterday after Federal Reserve chair Jerome Powell said the US economy is showing “signs of resuming its disinflationary trend,” helping bolster the likelihood of a rate cut in September. Speaking at a...

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