The US dollar gave up ground to most of its rivals once more as fresh setbacks to tax reform loomed. Senator Paul Rand shared plans to abolish an Obamacare provision tied to tax legislation and this could mean more complications when it comes to working with the House version, which is scheduled to be voted on this week. US PPI came in stronger than expected with 0.4% gains for both headline and core figures. CPI and retail sales are due today and strong data could still be upstaged by tax reform updates.
The euro was the strongest performer as it raked in gains across the board on upbeat GDP data. The German economy grew 0.8% versus the projected 0.6% expansion while Italy’s GDP came in line with estimates at 0.5%. The region’s growth figure landed at 0.6% as expected. French final CPI and the region’s trade balance are lined up next.
The pound dipped upon seeing weaker than expected UK inflation data. Headline CPI came in weaker than expected for October as the reading held steady at 3.0% instead of improving to the estimated 3.1% figure. Core CPI was also unchanged at 2.7% instead of rising to 2.8%. The claimant count change and the average earnings index are lined up next, with the latter expected to fall from 2.2% to 2.1%.
The franc also advanced against most of its peers as PPI beat expectations. Producer prices rose 0.5% versus the projected 0.2% uptick to signal stronger inflationary pressures down the line. There are no reports due from the Swiss economy today so market sentiment could push franc pairs around.
The Japanese yen advanced to the dollar and comdolls but was weaker against the European currencies. Japan’s economy expanded by 0.3% in Q3 versus the projected 0.4% growth figure and the earlier 0.6% GDP reading. The GDP price index posted a 0.1% uptick as expected and the revised industrial production figure is due next.
Commodity Currencies (AUD, NZD, CAD)
The Aussie was the weakest of the bunch as it got dragged lower by downbeat Chinese data and weak wage growth. Fixed asset investment, industrial production, and retail sales from China came in below consensus, signaling weaker demand for commodities. The quarterly wage price index came in at 0.5% versus 0.7%. US crude oil inventories data is due next.