With no major economic report, Asian session traders focused on a possible U.S. government shutdown. Meanwhile, weaker oil prices dragged the Loonie lower.
- U.S. Lower House passes stopgap spending bill
- BOJ keeps bond-buying pace steady
- Fed’s John Williams to become next Vice Chair?
Lower House passes stopgap spending bill
A few hours ago the U.S. congress voted 230-197 to approve a fresh injection of funds that would keep government operations alive through February 16. But Uncle Sam isn’t over the hurdle just yet!
Senators still have to pass the bill before the end of the week, which is trickier now that bitter debates have led to the lawmakers postponing the vote to Friday.
It also doesn’t help that Senate majority leader Mitch McConnell is rumoured to be preparing a contingency plan in case of a shutdown. With drama like these, who needs soap operas, amirite?
Oil prices slip
Oil prices continued their descent after a recent EIA inventory report showed an increase in U.S. oil production. Added to that, traders are also starting to price in a fall in demand for when winter ends in the northern hemisphere.
- U.S. WTI dropped by 1.16% to $63.21 per barrel while
- Brent crude slipped by an additional 0.12$ to $68.92 per barrel.
Yuan continues its winning streak
The People’s Bank of China (PBoC) set the yuan’s parity rate against the dollar at 6.4169 today, which is not only lower than yesterday’s 6.4180 close but puts the yuan to its highest level since December 2015.
For newbies out there, you should know that yuan-buying has been cited as one of the reasons why the dollar can’t catch a break despite the higher Treasury yields, hawkish Fed members, and relatively strong data from Uncle Sam.
See, with the yuan strengthening and other major central banks showing hints of tightening, fund managers are looking elsewhere to put their moolah.
Major Market Mover(s):
The Greenback sustained more losses across the board as traders continued to worry over a possible government shutdown by the end of the week.
EUR/USD is up by 0.22% to 1.2264;
GBP/USD is up by 0.19% to 1.3920;
USD/JPY down by 0.22% to 110.85, and
USD/CHF is down by 0.23% to 0.9567.
The continued slide in oil prices soon took its toll on the oil-related Loonie.
CAD/JPY is down by 0.17% to 89.29;
EUR/CAD is up by 0.20% to 1.5224;
GBP/CAD is up by 0.16% to 1.7276, and
CAD/CHF is down by 0.19% to .7707.
The combo of higher yuan and a bit of dollar weakness translated to strength for the Australian dollar.
AUD/USD is up by 0.24% to .8017;
AUD/JPY is up by 0.01% to 88.87;
AUD/NZD is up by 0.18% to 1.0972, and
AUD/CAD is up by 0.23% to 0.9953.
Watch Out For:
- 7:00 am GMT: Germany’s PPI (0.2% expected, 0.1% previous)
- 8:15 am GMT: Switzerland’s PPI (0.4% expected, 0.6% previous)
- 9:00 am GMT: Euro Zone’s current account (31.3B EUR expected, 30.8B EUR previous)
- 9:30 am GMT: U.K.’s retail sales report (-0.8% expected, 1.1% previous)