The U.S. Dollar has been swinging within tight ranges and is likely to close the week in similar fashion as markets await the chance of tax reform legislation passing the Senate.
Senator Bob Corker of Tennessee is said to be an obstacle towards voting and maintaining confidence of necessary support. Any headlines that provide guidance into proceedings will drive markets one way or the other.
Additionally, market participants are paying attention to news of a potential exit by Secretary of State Rex Tillerson, who is said to be threading on thin ice with the White House. In terms of data, manufacturing gauges like PMI and New Orders will be released at 9:45AM while Construction Spending at 10AM. We think positivity could help recover some of this week’s losses.
The Euro is trending in favorable ranges as focus remained on U.S. political developments. However, this may change in upcoming weeks as Chancellor Angela Merkel continues to run into problems as she negotiates building a coalition. Nevertheless, the balance for the shared currency came in as news of slightly than expected Manufacturing Purchasing Managers Index figures.
Economics are keeping the Euro afloat, but the potential unstable situation in the largest economy of the Euro-bloc is cause for concern. Italy also faces the prospect of new anti-establishment leadership going into 2018.
The Canadian Dollar improved by over 1.0% meriting appreciation on the basis of solid Gross Domestic Product Growth during the month of September. Data showed a 0.2% expansion over the estimated 0.1%, bringing the yearly average to 3.3%, a level that satisfies the Bank of Canada’s outlook. Oil prices also being on the way up as winter sets in and OPEC extends production cuts could result in further gains before the year ends.