The US dollar slid slightly overnight and we do not expect much volatility today.
The Bloomberg Dollar Spot Index is headed for its second week of losses over the past nine weeks. The greenback suffered yesterday over concerns the GOP tax reform plan faces high hurdles. The Senate version released yesterday contained big differences from the House plan. A delay or failure of tax reform would be a dollar-negative event.
EUR/USD was mostly unchanged overnight after the Euro gained on mostly dollar weakness yesterday. ECB Governing Council member said that while QE is set to run until September, “we should then bring it to an end if the economy develops in a way that we currently expect.” The comments gave the common currency a minimal boost but on a slow day, it seems worth mentioning.
The British pound popped higher against the U.S. dollar overnight on the back of strong economic data. U.K. production and manufacturing production data came stronger than expected. However, strong data today does not take away the near-term political risks surrounding Brexit. In addition, Prime Minister Theresa May remains under pressure. Therefore, expect any Sterling gains to be short-lived over the medium term.