USD

The US dollar regained ground against the major currencies as U.S. lawmakers passed a bill to raise the country’s debt ceiling and avoid defaulting on its loans. 

This was enough to spark a brief relief rally for the dollar as traders expected the U.S. government to end the shutdown soon. In terms of data, there hasn’t been much from the U.S. as traders are looking at earnings reports instead. US initial jobless claims and Philly Fed index are up for release today, with claims expected to drop from 374K to 357K for the past week and the manufacturing index slated to dip from 22.3 to 15.4. 

EUR

The euro lost some ground to the dollar on the heels of the House-approved debt ceiling bill. Euro zone CPI and core CPI simply came in line with expectations, as the headline figure showed a 1.1% increase while the core CPI printed a 1.0% uptick. Euro zone current account is up for release today and it’s expected to show a larger surplus of 17.7 billion EUR compared to the previous 16.9 billion EUR, but this release is not expected to have a huge impact on euro trading. 

GBP

The pound rallied after the UK printed better than expected jobs data but it lost ground later on, as the US Senate passed the bill to raise the debt limit. UK claimant count change fell to its lowest level in five years, as the figure clocked in a 41.7K drop in the number of people claiming jobless benefits. This kept the jobless rate steady at 7.7%. For today, UK retail sales are up for release and another upside surprise might be in the cards. The consensus is for a 0.5% rebound from the previous 0.9% decline. 

CHF

  The Swiss ZEW economic expectations report printed another improvement, as the index rose from 16.3 to 24.9. For today, there are no reports due from Switzerland so the USD/CHF pair might be more sensitive to updates from Washington. The US government shutdown might end soon, now that the lawmakers have agreed on a deal to raise the debt limit. 

JPY

The yen extended its slide to the major currencies as more progress has been made in the US budget debates. There were no reports released from Japan yesterday and none are due today, which suggests that the yen could keep moving to the tune of risk flows. 

Commodity Currencies (AUD, NZD CAD)

The comdolls managed to hold steady against the US dollar, as risk appetite improved yesterday. Canadian manufacturing sales turned out weaker than expected at -0.2% versus the estimate at 0.3% and the previous 1.7% increase. No reports are due from Australia and New Zealand today but Canada will be gearing up to release its foreign securities purchases report, slated to show a small increase from 6.09 billion CAD to 7.12 billion CAD. 

By Kate Curtis from Trader’s Way