USD 

The US dollar rallied when Treasury Secretary Mnuchin reiterated that they have a detailed plan for tax reform set to be implemented before the end of the year.

He also suggested that the debt ceiling deadline be moved forward to unlock funds needed for relief efforts related to Hurricane Harvey. US Challenger job cuts rose 5.1% while the core PCE price index came in line with expectations of a 0.1% uptick. The Chicago PMI was unchanged at 58.9 while pending home sales sank 0.8%. 

EUR 

The euro returned some of its recent gains even as euro zone CPI beat expectations. There has been talk that ECB officials are feeling uneasy about euro strength, leading bulls to doubt that the central bank is looking to taper asset purchases soon. Headline flash CPI advanced to 1.5% while the core reading held steady at 1.2% as expected. 

GBP 

The pound was also in a bit of a weak spot after EU’s lead Brexit negotiator Barnier remarked that they haven’t made much progress with the issues being discussed and that they are still a long way from talking about trade activity. MPC member Saunders gave his usual hawkish remarks but warned that Brexit could undermine business and consumer confidence. The UK manufacturing PMI is due today and a dip from 55.1 to 55.0 is expected. 

CHF 

The franc had a mixed performance as it reacted mostly to currency-specific events and profit-taking. There were no reports out of the Swiss economy and none are due today so the same kind of price behavior could be seen. 

JPY 

The yen returned some of its recent gains as data came in weaker than expected. Preliminary industrial production sank 0.8% while housing starts fell by 2.3% instead of printing a mere 0.2% drop. Capital spending, final manufacturing PMI, and consumer confidence data are due next. 

Commodity Currencies (AUD, NZD, CAD) 

The Loonie led the pack thanks to stronger than expected Canadian GDP for June. This brought the quarterly rate up to 4.5% spurred by stronger consumer spending and export activity. Crude oil ticked slightly higher in anticipation of stronger gasoline purchases during the US Labor Day weekend. Australia’s AIG manufacturing index and commodity prices data are lined up. 

By Kate Curtis from Trader’s Way