The US dollar was off to a weak start on Monday but soon regained ground during the US session. There were no major reports printed, although the stronger than expected NAHB housing market index may have led to a few gains. US building permits and housing starts are lined up for today but these might not have a lasting impact since traders are holding out for the FOMC decision.
The euro continued to weaken against its peers, except for the British pound and Swiss franc. The current account surplus narrowed from 29.5 billion EUR to 21.0 billion EUR, lower than the projected 27.2 billion EUR figure. Only the German PPI is up for release today and a 0.1% uptick in producer prices is eyed.
The pound was still one of the weakest performers for the day as traders continued to mull the impact of the Brexit on the UK economy. Last Friday, UK Chancellor Hammond noted that they risk losing access to the single European market if they push for immigration reforms in the Brexit negotiations.
The franc regained ground to the dollar, continued to advance against the pound, and gave up ground to the euro. There were no reports out of the Swiss economy, leaving the franc to act as a countercurrency. Swiss SECO economic forecasts are up for release today, along with the trade balance which might show a wider 3.27 billion CHF surplus.
The yen benefitted from the lack of risk appetite in the markets, although traders might also be pricing in ahead of a possible BOJ disappointment. Reports have been giving mixed signals, with dovish hints from BOJ Governor Kuroda and the lack of conviction from other policymakers. Japanese banks will reopen from their Monday holiday today.
Commodity Currencies (AUD, NZD, CAD)
The comdolls tossed and turned through out the day as the risk switch was flipped on and off. Crude oil had a bit of a boost on hopes of an oil production cap during the Algiers OPEC gathering but the commodity soon returned its gains. Australia reported a 0.4% increase in its CB leading index, up from the earlier 0.3% reading. RBA meeting minutes are due next and New Zealand will have its GDT auction in the next Asian session.