The dollar managed to hold on to most of its recent gains as equity indices shot to record highs on strong auto sales. Total vehicle sales posted their strongest rise so far this year as purchases were made to replace cars damaged by the hurricanes. The ISM non-manufacturing PMI and ADP non-farm employment change data are lined up today and these are considered leading indicators for the NFP. Fed head Yellen also has a speech lined up and might have more clues on Fed policy biases.


The euro was slightly weaker against most of its peers as political uncertainty stemming from the Catalan elections continued to haunt the shared currency. Spanish unemployment change data came in weaker than expected at a 27.9K increase in joblessness versus the estimated 21.3K gain. Final services PMI readings and the region’s retail sales report are lined up next, along with a speech by ECB head Draghi.


The pound was one of the weakest performers of the day as it was dragged down by weak construction PMI. The reading slumped from 51.1 to 48.1 instead of holding steady as expected and the services PMI is due next. Analysts are also expecting no change from the earlier 53.2 figure but a disappointment may be underway, given how the other sectors turned out. The BOE FPC also judged that Brexit could pose larger risks to the banking sector than initially anticipated.


The franc remained supported throughout the day, despite the lack of top-tier data from Switzerland. There are still no reports due from the Swiss economy today but the presence of risk-off vibes, particularly in the European region, could render this currency the safe-haven of the bunch.


The yen was also able to hold its ground as a bit of risk aversion lingered in the markets on geopolitical risks. The BOJ core CPI ticked higher from 0.4% to 0.6% to reflect stronger inflationary pressures and a potential shift to a less dovish stance for the central bank later on. Japanese consumer confidence also improved from 43.3 to 43.9 versus the 43.5 consensus.

Commodity Currencies (AUD, NZD, CAD)

The comdolls tried to hold steady against the dollar and chalked up some wins to the European currencies. New Zealand’s GDT auction yielded a 2.4% drop in dairy prices, following the earlier 0.9% gain. The API reported another draw in crude oil stockpiles so the EIA report due today could also show a reduction, with analysts expecting to see a drop of 0.5 million barrels.

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