The US dollar was able to brush off downbeat housing market data as traders were already aware that these were skewed by the recent hurricanes. Also Fedspeak was more hawkish than usual, with members Kaplan and Dudley acknowledging the tightness in the labor market and its potential impact on wages and inflation. The Fed Beige Book also underscored these views and repeated that the economy is expanding at a modest to moderate pace. Initial jobless claims and Philly Fed index are due next.
The euro was in a weak spot as political uncertainties took over price action in the absence of top-tier data or upbeat remarks from Draghi. Looking ahead, updates on Austria’s polls could continue to keep traders on edge in the region while the pickup in risk-taking could also dampen demand for the currency.
The pound had a positive reaction to the jobs report as the average earnings index held steady at an upgraded 2.2% reading. Claimant count came in at 1.7K versus the projected 1.3K figure. Brexit updates led to a bit of volatility but the UK currency managed to maintain its rally. UK retail sales data is due next and a 0.1% dip is expected.
The franc slid lower as risk appetite came into play and there were no reports to boost the currency. Swiss trade balance is due today and analysts are expecting to see a a higher surplus of 2.47 billion CHF compared to the earlier 2.17 billion CHF figure.
The yen was one of the weakest performers for the day as risk-taking took hold of the markets. Global bond yields were also up and yen bulls might have reduced their exposure to the weekend’s elections. Japan’s trade balance missed expectations and showed a smaller surplus of 0.24 trillion JPY compared to the estimated 0.31 trillion JPY figure.
Commodity Currencies (AUD, NZD, CAD)
The Loonie enjoyed a strong boost from better than expected Canadian manufacturing sales data and more indications that the OPEC could extend its output deal. Sources have revealed that a nine-month extension is possible while others have said that the cartel is looking at a time frame of six to nine months. EIA crude oil stockpiles also saw a larger than expected draw of 5.7 million barrels. In New Zealand, NZ First Party leaders is set to announce his decision on which party to support today.