Having gapped lower at the open on Monday following the weekend Senate vote on the tax bill, the US$ has traded in a relatively tight range against most pairs although Sterling remains relatively underpinned after comments from the EU’s chief Brexit negotiator, Guy Verhofstadt, that there is a 50/50 chance of making progress in the negotiations. Elsewhere, the Swiss Franc and Yen are trading broadly lower as risk appetites return. In other markets, stocks are rangebound, after having briefly made yet another new all time high, while the metals are steady and oil prices headed lower due to concerns that rising US shale output could dampen efforts to lower global oil supplies.
Tuesday could be busy, particularly for the Aud$ which kicks off with the AIG Services PMI, Current Account, the Oct Retail Sales and the New Home Sales, to be followed by the Caixin China Services PMI and the RBA Interest Rate Decision. No change is expected from the RBA and the focus will be on the Statement. Europe will then look to the Services/Composite PMIs for guidance, along with the EU Trade Balance, ahead of the US session when the Services/Composite PMIs and the ISM Non-Mfg PMI will be in focus. Kiwi traders should note that the Global Dairy Trade Index will be released at midday- London time.
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