USD
The dollar has gotten a boost from news that the House passed a budget resolution to allow the tax bill to clear Senate without achieving a supermajority.
US advance GDP data for Q3 is due next and hopes are running high after the durable goods orders report suggested a stronger contribution from the business sector for the period. Analysts are expecting to see a 2.6% growth figure, slower than the earlier 3.1% expansion. News on Trump’s Fed Chair pick could also lead to big moves for the dollar.
EUR
The euro suffered a strong selloff during the ECB decision, which was seen as a dovish taper. The ECB plans to maintain its 60 billion EUR monthly asset purchase program until the end of the year then tapering it down to 30 billion EUR per month from January to September 2018 or beyond if necessary. Draghi admitted that the decision was not unanimous and that inflation has not been encouraging but expressed optimism that growth could continue. Data on German import prices is due next.
GBP
The pound commiserated with the euro after the ECB announcement as this also sparked concerns that the upcoming BOE decision might not be so hawkish. Besides, the CBI realized sales index posted a surprise tumble from 42 to -36 versus the estimated dip to 14. This signals that business conditions aren’t looking too good, following the disappointment in the CBI industrial order expectations index earlier in the week. There are no reports due from the UK economy today.
CHF
The franc gave up ground to some of its peers as EUR/CHF did not rally strongly after the ECB decision, keeping traders wary of future intervention by the SNB. There were no reports from Switzerland yesterday and none are due today so market sentiment could push franc pairs around.
JPY
The yen lost ground to the dollar but managed to advance against most of its rivals. Data from Japan has been slightly better than expected, with the Tokyo core CPI beating expectations with a 0.6% uptick versus the projected 0.5% gain. The national core CPI came in at 0.7% as expected. There are no other reports lined up from Japan so the yen might take its cue from bond yields, sentiment, and dollar demand.
Commodity Currencies (AUD, NZD, CAD)
The comdolls were mostly weaker, except against the euro, as the gang is not likely to see any rate hikes from their respective central banks anytime soon. In Australia, quarterly PPI disappointed with a meager 0.2% uptick versus the estimated 0.4% gain. There are no other reports due from the comdoll economies next so market sentiment could take control.
By Kate Curtis from Trader’s Way
