The U.S. Dollar is trading in choppy ranges, only succumbing losses to its commodity-based counterparts as the flows of oil have benefitted other resources.
Metals markets also pushing higher boosted the Oceanic currencies, Aussie and Kiwi. An interesting correlation is the one recently between the buck and the prices of oil, which for many weeks have worked in tandem appreciating in unison. This relationship has been closer than the one between black gold and petro-currencies such as Canadian Dollar and Peso, whose flows have ignored higher energy costs.
This week will close without much slated that could affect current ranges. Legislative successes are still a potential driver of dollar strength, but the progress has been rather anemic as the President also happens to be on a diplomatic tour. We see next week’s heavier data week as more influential.
The Japanese Yen is still threading around its weakest levels since July, a victim of risk-appetite and the never-ending record-setting across global equities lately. Prime Minister Shinzo Abe consolidated power, but this has only translated into further Yen depreciation because of the continuation of his accommodative policies towards the economy, one still plagued with deflationary pressures.
We see the last quarter of the year as one of relative calm for the Yen since the Bank of Japan’s focus on controlling the yield curve and keeping easing measures in place will undermine any other headlines.
Sterling is once again afflicted by government issues as another minster in Prime Minister Theresa May’s cabinet is not acting right. Only a week ago, May had to accept the resignation of her Defense Minister after allegations of inappropriate sexual behavior and now will need to look into the Minster of International Development’s acts of defiance.
Priti Patel, the minister who was on travel around Africa on assignment, apparently unofficially conducted other business and met with Israeli officials, without approval. Furthermore, Wall Street banks are reported to be in discussions about how Brexit and all the baggage behind it will force thousands of jobs out of London soon.