The US dollar drew some support from news that Congress has been able to pass the tax bill in their vote this week. However, the currency quickly returned its wins as traders turned their attention to the challenges that lie ahead. For one, Senate has a very different version and it would take a while before both chambers come up with a unified one. Data turned out mixed, with industrial production and capacity utilization coming in better than expected. Import prices and the Philly Fed index, on the other hand, disappointed. Only building permits and housing starts are due today.
The euro retreated slightly against its peers as there were no major reports out and traders focused on the political uncertainty in Germany. Final CPI readings were unchanged at 1.4% for the headline figure and 0.9% for the core reading. ECB head Draghi has a speech today and Italy will release its trade balance, just after the release of the region’s current account balance.
The pound got some support from stronger than expected UK retail sales. The report showed a 0.3% uptick versus the projected 0.1% gain. There are no reports due from the UK economy today so traders might be extra sensitive to Brexit updates.
The franc gave up some of its previous wins as risk-taking returned. There were no reports out of the Swiss economy then and the currency didn’t draw any support from SNB member Maechler’s speech. There are no reports due from the Swiss economy today so market sentiment is likely to stay in play.
The yen was also in a weak spot as risk appetite was present in the financial markets. There were also no reports out of Japan then and none are due today so risk sentiment could continue to push yen pairs around.
Commodity Currencies (AUD, NZD, CAD)
The Australian dollar drew support from stronger than expected jobs data as the economy added only 3.7K jobs in October but saw a large upgrade in the earlier figure to 26.6K. Underlying data also showed that full-time hiring was actually strong but the gains were nearly wiped out by falling part-time hiring. Canadian CPI figures are due next and downbeat data could weigh on the Loonie. New Zealand’s quarterly PPI readings came in below expectations at 0.1% gains for input and output prices.