Economic Data, FED Chair Powell and the Oval Office Put the USD in Focus

Following Trump’s comments on Powell, the Dollar is back in focus, with the FED Chair on the docket late in the day, with a heavy day of stats ahead.
Bob Mason
USD, Powell

Earlier in the Day:

Economic data released through the Asian session this morning was on the lighter side, with key stats limited to 3rd quarter construction work done figures out of Australia.

For the Aussie Dollar, construction work done fell by 2.8% in the 3rd quarter, quarter-on-quarter, coming up well short of a forecasted 0.9% increase, whilst also reversing a 2nd quarter 1.6% rise.

According to figures released by the ABS,

  • Quarter-on-quarter, building work down fell by 1.5%, with residential and non-residential work down falling by 1% and by 2.4% respectively, while engineering tumbled by 4.5%.
  • Year-on-year, construction work done was down by 16.9%, with engineering work done sliding by 34.4% to pull total work done into the red.

The Aussie Dollar moved from $0.72333 to $0.72295 upon release of the figures, before moving back to $0.72333 at the time of writing, a gain of 0.11% for the session.

Elsewhere, the Kiwi Dollar was up 0.1% to $0.6796, while the Yen was down 0.04% to ¥113.84 against the U.S Dollar, with direction coming from market risk appetite ahead of the FED’s FOMC meeting minutes and the G20

The Day Ahead:

For the EUR, stats scheduled for release through the day are limited to December consumer confidence numbers out of Germany that could set the EUR up for more bearish bias should the numbers be in line with or worse than forecast, October business confidence numbers having already disappointed on Monday.

Outside of the data, we can expect some positioning ahead of the G20, with FED policy to also be a factor, FED Chair Powell scheduled to speak later in the day.

At the time of writing, the EUR was up 0.05% to $1.1295, with today’s stats and chatter on Italy the key drivers through the day.

For the Pound, it’s another quiet day on the data front, leaving the markets to continue to focus on Theresa May and Brexit chatter from the UK.

Following Trump’s comments on the Brexit deal, the Pound is certainly on the back foot, with Parliament seemingly set to send Britain into a disorderly departure that may also lead to a fresh General Election and the return of the Labour Party, none of the above a positive.

At the time of writing, the Pound was down 0.05% at $1.2741, with Brexit news the key driver through the day.

Across the Pond, economic data released through the day is on the busier side, with key stats scheduled for release including finalized 3rd quarter GDP numbers and October trade data and new home sales figures, the Dollar likely to be particularly sensitive to the numbers, U.S President Trump likely to be scouring the trade figures ahead of the G20 that starts on Friday.

Outside of the numbers, FED Chair Powell will also have a material influence on the Dollar, with any hawkish chatter likely to further spur the Dollar.

At the time of writing, the Dollar Spot Index was up 0.01% to 97.38, with today’s stats and FED chair Powell will be key drivers through the day, though chatter from the Oval Office will need to be monitored through the day.

For the Loonie, a quiet day ahead leaves the Loonie in the hands of crude oil prices, with the weekly EIA report in focus through the early afternoon.

The Loonie was down 0.06% to C$1.3302 against the U.S Dollar at the time of writing.

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