The U.S. dollar extended its modest gains across the board overnight.
The Bloomberg Dollar Spot Index is headed for its eighth day of gains in the last nine days but is approaching key technical levels that could slow its progress.
The U.S. dollar’s biggest gains came against the Australian and New Zealand dollar. Australia’s trade balance missed all economists’ estimates putting downward pressure on the south pacific currencies.
Today’s economic docket is light with only weekly jobless claims crossing the wires before tomorrow’s non-farm payroll print. The greenback’s gains are still susceptible to political headline risk. While GOP members of the House and Senate attempt to iron out the differences between their tax reform bills, a potential government shutdown looms. The government will run out of money tomorrow. President Trump is set to meet with congressional leaders of both parties today. The most likely result will be another short-term extension to fund the government into January.
The Euro continued its slow slide against the U.S. dollar overnight, falling to a fresh two-week low against the greenback. European data was mixed. The final reading of Eurozone third quarter GDP came in line with expectations of 0.6% quarter of quarter growth. A separate report showed disappointing German industrial production. Germany has released a slew of lackluster economic data in recent weeks, which could account for some of the common currency’s recent weakness.
The EUR/USD pair is trending slightly higher this morning as the traders test technical and psychological levels.
Limited progress in Brexit negotiations weighs on the sterling. Sound familiar? The sterling is now at a one-week low against the U.S. dollar on political headlines. The Sun reported that Prime Minister Theresa May will hold a Cabinet meeting on the government’s vision for Brexit. Members of her own party have criticized the PM for her “soft Brexit” stance. There are also other reports that say the Conservative party may attempt to replace May before Christmas. The EU summit is scheduled for December 14-15th.