After getting beaten up by its peers in the previous trading sessions, the U.S. dollar was able to get back on its feet thanks to a couple of strong data points and the latest round of developments in Washington.
- Former FBI head Comey said he was not pressured to end Russia investigation
- U.S. initial jobless claims down from 236K to 232K vs. 240K forecast
- Philly Fed manufacturing index up from 22.0 to 38.8 vs. 19.9 forecast
- U.S. CB leading index unchanged at 0.3% vs. 0.4% consensus
The latest on “Trumpgate”
In the previous episode of this political drama series, the U.S. Justice Department ordered a probe into Trump’s leaking of highly-sensitive classified information to Russian officials. This led to speculations that the administration’s fiscal reform agenda might be put on the back burner and that the Donald himself might find himself on the receiving end of “You’re fired!”
The latest plot twist revealed that former FBI director Comey who was fired by Trump wasn’t pressured to drop the investigation on whether or not the White House is cozying up to Russia. At least that’s how most viewers are interpreting it.
Market watchers also turned their focus to other developments in Washington, particularly the NAFTA renegotiation letter sent to Congress. Apart from that, VP Pence is also putting his Twitter skills to use in attempting to reassure the markets.
- Dow 30 index is up 56.09 points (+0.27%)
- S&P 500 index is up 8.69 points (+0.37%)
- Nasdaq is up 43.89 points (+0.73%)
Mostly upbeat U.S. reports
A couple of stronger than expected medium-tier reports from Uncle Sam may have also factored in the dollar’s relief rally in the New York session.
Initial jobless claims came in at 232K, lower than the earlier 236K increase in joblessness and the projected 240K in claimants, reflecting positive momentum in the labor market. The Philly Fed manufacturing index posted a surprise jump from 22.0 to 38.8 to reflect a much stronger pace of industry growth versus the expected dip to 19.9.
However, the CB leading index remained unchanged from the downgraded 0.3% figure in April instead of posting a small improvement to 0.4%. Still, the Conference Board assured that the dip in Q1 growth and consumer activity is likely to be transitory and that the positive outlook points to more green shoots down the line.
Major Market Movers:
Weirdly enough, sterling chalked up the biggest moves for the session as it erased its gains from earlier in the day and more.
GBP/USD sank from a high of 1.3048 to a low of 1.2889, GBP/JPY tumbled from a high of 144.82 to a low of 143.41, EUR/GBP bounced off the .8525 area to a high of .8612, and GBP/CHF rallied to a high of 1.2787 before quickly reversing to 1.2631.
Watch Out For:
- 11:45 pm GMT: New Zealand visitor arrivals (1.9% previous)
- 4:00 am GMT: New Zealand credit card spending y/y (7.1% previous)