The US$ is generally firmer today without any one particular reason although there was talk of dollar supportive month end flow despite today being only the 28th. Sterling seemed to lead the way lower for the dollar’s counterparts, and remains under heavy pressure because of the general criticism of the Brexit deal, with Donald Trump today throwing some cold water on Theresa May’s plans by questioning the future of US/UK trade. The dollar also seemed to receive support after Trump’s renewed threats to China on tariffs, in stating that he is “highly unlikely” to drop the planned tariff hike on Jan 1 and more could come if no deal is made with Xi this week at the G20. Also underpinning the dollar was the Federal Reserve Vice Chair Richard Clarida, who backed further interest rate hikes but noted the importance of monitoring economic data
The metals reacted to the dollar’s strength by heading lower, with Gold/Silver down by around 0.8% and with Copper down by 1.5%, which may weigh on the Aud$ today. WTI and stocks have both been choppy, with WTI down around 0.5%, while stocks are up slightly, by 0.1%-0.4%.
Looking ahead, Wednesday will begin with the NZ Financial Stability Report and the Australian Construction Work Done for Q3. Europe will be thin (German Consumer Confidence, UK Bank Stress Tests) but the US will see the Preliminary Q3 GDP (exp 3.5%yy), October Wholesale Inventories (exp 0.5%), Goods Trade Balance (exp $-76.7 bio), New Home Sales (exp 4.3%mm), Richmond Fed Mfg Index (exp 16). Probably more important than any data will be Fed Chair, Jerome Powell who will be speaking late in the session, as will the BOE Governor, Mark Carney
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