On Friday (May 22), the Canadian dollar strengthened in early trading, but driven by risk aversion, the situation quickly deteriorated. At the 13th National People’s Congress held on Friday, China announced a new “National Security Law” plan against Hong Kong. Many people worried that this would seriously weaken Hong Kong’s autonomy. The news exacerbated the already delicate geopolitical situation. US President Trump promised that if Hong Kong’s existing privileges were terminated, the US would retaliate.

Affected by the new crown epidemic, China did not set specific targets for the annual economic growth rate in the latest government work report, which means that the world ’s largest oil importer will have an economic uncertainty period longer than expected. The news triggered fears that the global economic recovery might be in danger, and investors immediately flocked to buy US dollars, suppressing the Canadian dollar’s uptrend that might have accelerated.

When risk sentiment turns negative, USD / CAD soars. The uptrend continued to 1.4034, driven by stop-loss buying that rose above 1.3960. In early trading in Toronto, the USD / CAD fell to 1.4005. Subsequently, Statistics Canada released retail sales data for March. Retail sales in March fell by 10% year-on-year, in line with expectations, but far below the previous value of 0.3%.

GBP / USD rebounded from 1.2072 on Monday to 1.2287 yesterday and is currently under pressure. In early trading in Toronto, GBP / USD has dropped back to 1.2177. Weak economic data in the UK and the pessimistic comments of Bank of England Deputy Governor Dave Ramsden also weighed on the exchange rate. He warned that the quantitative easing may be increased at the June meeting, and the possibility of negative interest rates has not been ruled out. In addition, the UK announced a record budget deficit, with retail sales falling by 22.6% in April.

Due to the general demand for the US dollar, the euro / dollar, the Australian dollar / dollar and the New Zealand dollar / dollar fell.