The US dollar recovered against some of its peers at the start of the week as traders renewed hopes for tax reform progress. There were no reports from the US economy yesterday while today has PPI data and a speech by Chairperson Yellen. The House is scheduled to vote on their version of the tax bill on Thursday and Trump will be giving a speech to urge GOP members to work together.


The euro advanced against most of its counterparts as it took some of the flows from the pound. Traders are also likely bracing for strong flash GDP data from Germany, Italy, and the entire region. ECB head Draghi has a testimony scheduled, ahead of the release of German ZEW economic sentiment data and euro zone industrial production.


The pound was off to a terrible start in the week on reports of troubles in UK PM May’s government but traders quickly booked profits off the short positions ahead of this week’s top-tier releases. For today, the CPI readings are due and the headline figure is expected to climb from 3.0% to 3.1% which might keep the BOE in hiking mode. Core CPI could also tick higher and BOE head Carney has a speech due.


The franc was able to scrape some gains on risk-off flows for the most part of the day. There were no reports out of the Swiss economy yesterday while today has PPI numbers due. Producer prices could post a 0.2% uptick, slower than the earlier 0.5% gain.


The yen also took advantage of risk aversion yesterday but traders could be a little more cautious ahead of the Japanese preliminary GDP release later on. The economy likely grew 0.4%, slower than the earlier 0.6% expansion. BOJ head Kuroda has another speech lined up and he is expected to highlight the effectiveness of the QQE program and the challenges facing inflation.

Commodity Currencies (AUD, NZD, CAD)

The Aussie was on rocky footing ahead of Chinese data due today. Industrial production and fixed asset investment are projected to fall, which would signal weaker demand for raw materials and commodities, while retail sales could tick higher. Crude oil is having trouble sustaining its climb on rising US oil rig counts, leading many to book profits off the positively-correlated Loonie as well.

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