Tax reforms in the US remains big on investors minds as a delay which they are are uncomfortable with lingers. USD/JPY lost 0.2% dropping to 113.22. US senators are paring some of the corporate tax cuts in an effort to keep the impact of the proposed bill under $1.5 trillion. Republican senators are pushing back the timelines on reducing the corporate tax rate until 2019 and will water down the original plan introduced by the Trump Administration. Treasury Secretary Steven Mnuchin has already said that a delay is better than a longer phase in. The amount of differences between the Senate proposal and the one working its way through the House of representatives are considerable and increase the chances of the tax overhaul not being a reality in 2017. Unemployment claims was disappointing rising to 239,000 falling short of analyst forecast by 7,000. This is opined to come on the back of improvement of claims processing disrupted by the hurricanes. Despite the increase, claims remain far below the 300,000 mark. This feat, which holds true for the 139th consecutive week (the longest since 1970), signals a robust jobs market. Wholesale inventory data was just in-line with investors expectations at 0.3%. Though the US is on a bank holiday, prelim consumers sentiments and inflation expectations are data to look for on the release front.
GBP/USD shrugged off Brexit noise as it rose 0.11% to 1.3131 given unimpressive economic data from the US. The Brexit talks resumed and Britain's financial obligation to the EU remains a challenge. The European Union is demanding EUR 60 billion, while Britain has countered with an offer for EUR 20 billion. The trade deal is most important to Britian, but the Europeans are insisting on more progress on the fulfillment of financial obligations as well as on other non-trade issues. If the sides still remain deadlocked in December without no deal in sight, hardliners on both sides could derail the talks completely, which would send shivers up the spines of investors and hurt the British pound. The Prime Minister's ability to follow through with Brexit remains a major issue as two ministers recently to resign from May's cabinet forcefully, and she hasn't been able to present a coherent Brexit policy to the Europeans or to the voters at home. BoE chair Mark Carney expressed concern at the lack of uncertainty over a final deal with the European Union, saying that the economy "should really be booming, but it's just growing." Economic data expected from the UK are manufacturing production, trade balance, construction output & industrial production all of which will dictate the direction of the pound today. GBP/USD & GBP/JPY traded flat during the Asian trading session.
The Euro was upbeat in Thursday's trading rising to 1.1653 against the dollar. The ECB's growth forecast for 2017 put the Euro-area's growth at 2.2%, 5 percentage points higher that the prior 1.7%. Its forecast of the UK's growth however fell to 1.5%. while it projects a slowdown for the nation in 2018-19 as well. Germany's trade balance rose above analyst forecast to 21.8b. Investors will be looking out for French industrial output and Prelim private payroll. Italy's industrial production is also expected to come in today. The currency remained flat against the dollar during the Asia session.
The RBNZ delivering what was perceived as a "hawkish hold" of rates at record low levels returned momentum to the NZD as it gained 0.2% rising to a 2 week high against the dollar to 0.6979 earlier in the day before it retreated. Despite the pullback, the pair retained most of its gains. Neighbors Australia had its Reserve Bank lower inflation forecast all through 2019. Although this was the likely outcome due to the change in CPI measurement methodology, AUD/NZD could experience a sell-off given the divergent monetary policy rhetoric of late between the RBNZ and RBA.
Commodities data showed Gold returned to a bullish run as the dollar wars with tax reforms. The yellow metal rose to 1,288. Brent crude retained it's above $60 price.
GBP/USD shrugged off Brexit noise as it rose 0.11% to 1.3131 given unimpressive economic data from the US. The Brexit talks resumed and Britain's financial obligation to the EU remains a challenge. The European Union is demanding EUR 60 billion, while Britain has countered with an offer for EUR 20 billion. The trade deal is most important to Britian, but the Europeans are insisting on more progress on the fulfillment of financial obligations as well as on other non-trade issues. If the sides still remain deadlocked in December without no deal in sight, hardliners on both sides could derail the talks completely, which would send shivers up the spines of investors and hurt the British pound. The Prime Minister's ability to follow through with Brexit remains a major issue as two ministers recently to resign from May's cabinet forcefully, and she hasn't been able to present a coherent Brexit policy to the Europeans or to the voters at home. BoE chair Mark Carney expressed concern at the lack of uncertainty over a final deal with the European Union, saying that the economy "should really be booming, but it's just growing." Economic data expected from the UK are manufacturing production, trade balance, construction output & industrial production all of which will dictate the direction of the pound today. GBP/USD & GBP/JPY traded flat during the Asian trading session.
The Euro was upbeat in Thursday's trading rising to 1.1653 against the dollar. The ECB's growth forecast for 2017 put the Euro-area's growth at 2.2%, 5 percentage points higher that the prior 1.7%. Its forecast of the UK's growth however fell to 1.5%. while it projects a slowdown for the nation in 2018-19 as well. Germany's trade balance rose above analyst forecast to 21.8b. Investors will be looking out for French industrial output and Prelim private payroll. Italy's industrial production is also expected to come in today. The currency remained flat against the dollar during the Asia session.
The RBNZ delivering what was perceived as a "hawkish hold" of rates at record low levels returned momentum to the NZD as it gained 0.2% rising to a 2 week high against the dollar to 0.6979 earlier in the day before it retreated. Despite the pullback, the pair retained most of its gains. Neighbors Australia had its Reserve Bank lower inflation forecast all through 2019. Although this was the likely outcome due to the change in CPI measurement methodology, AUD/NZD could experience a sell-off given the divergent monetary policy rhetoric of late between the RBNZ and RBA.
Commodities data showed Gold returned to a bullish run as the dollar wars with tax reforms. The yellow metal rose to 1,288. Brent crude retained it's above $60 price.
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