Last Friday, the British Pound remained under pressure and slipped to a fourweek low of $1.3063, dented by worries over a possible leadership battle at the top of the British government. Divisions over the future of British Prime Minister Theresa May burst into the open, with allies saying that she should carry on and a former Conservative Party chairman claiming the support of 30 lawmakers for a plot to topple her.
Meanwhile, the US Dollar rallied to its highest level since late July against a basket of major currencies, supported by hopes for progress on US tax forms. Congressional Republicans moved to hasten an overhaul of the US tax code last Thursday, with the Republican-controlled House of Representatives approving a fiscal 2018 spending blueprint to help advance an eventual tax bill. Furthermore, the Dollar also benefited after Philadelphia Fed President Patrick Harker said he has “penciled in” a rate hike for December, and as San Francisco Fed President John Williams endorsed higher rates, without commenting on timing. The focus remained on US job data, due later on Friday.
Last Thursday as well, the Canadian Dollar fell against the US Dollar, after domestic data showed a drop in exports for the third straight month, weakening prospects that the Bank of Canada would increase interest rates again this year. Statistics Canada said that the country’s trade deficit widened to $3.41 billion in August 2017 compared with a $2.98 billion deficit in July 2017.