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The Trump administration is hogging the forex spotlight in the U.S. session once more, and not in a good way. The lack of progress in its fiscal agenda continued to weigh on the Greenback as more investors doubted that tax reform could happen anytime soon.

  • U.S. import prices down 0.2% as expected vs. previous 0.1% dip
  • U.S. NAHB housing market index down from 66 to 64 vs. 67 consensus
  • BOE Governor Carney: Inflation data consistent with BOE estimates
  • Obamacare replacement bill blocked in Senate
  • Trump: “Eventually we will get something done.”
  • New Zealand GDT auction yielded 0.2% rebound in dairy prices

Major Events/Reports

Senate healthcare bill flop

More and more cracks in the Trump administration are showing as the Obamacare repeal, which barely clawed its way through Congress earlier this year, got shot down in Senate.

Keep in mind that Republicans hold majority in Senate but passing the healthcare bill replacement was anything but a piece of cake. At least three Republicans voiced opposition (Shelley Moore Capito of West Virginia, Susan Collins of Maine and Lisa Murkowski of Alaska) while Democrats are united in voting against the repeal.

Senate Republican leader Mitch McConnell admitted that it has been very, very challenging to get the healthcare bill across, especially since they need to press on with other aspects of the reform agenda. In other words, market watchers are realizing that if the Trump administration can’t make much progress in healthcare, it probably won’t get very far with tax reform and infrastructure spending.

U.S. equity indices returned some of their intraday gains, although the S&P 500 and Nasdaq managed to end in the green thanks to earnings reports:

  • Dow 30 index is down 54.99 points to 21,574.73 (-0.25%)
  • S&P 500 index is up 1.47 points to 2,460.61 (+0.06%)
  • Nasdaq is up 29.87 points to 6,344.31 (+0.47%)

Commodities slightly lower

Risk aversion from earlier trading sessions carried on for the rest of the day as private inventory data from the American Petroleum Institute revealed a surprise build in U.S. crude oil stockpiles.

Crude oil inventories rose by 1.63 million barrels versus the projected draw of 3.74 million barrels in the previous week. This could set the stage for an increase in stockpiles reported by the Energy Information Administration, even as analysts have projected a reduction of 3.6 million barrels.

  • WTI crude oil is down to $46.23 per barrel (-0.39%)
  • Brent crude oil dipped to $48.67 per barrel (-0.10%)

In New Zealand, the Global Dairy Trade auction yielded a small 0.2% uptick in dairy prices, which is still a decent rebound over the earlier 0.4% drop.

Major Market Mover(s):

USD

The likely failure of the healthcare bill vote weighed heavily on the dollar as this doused hopes of seeing tax cuts within the year or early next year.

EUR/USD advanced from 1.1524 to a high of 1.1584, USD/JPY retreated from 112.23 to 111.68, USD/CHF is back down to .9550, and AUD/USD is up to .7925.

GBP

Sterling was the only major currency unable to benefit from the dollar’s slide as downbeat U.K. data and acknowledgement from BOE head Carney kept a lid on rallies.

GBP/USD is down to 1.3035, GBP/JPY fell from 146.27 to a low of 145.30, EUR/GBP is up to .8860, and GBP/AUD tumbled from 1.6580 to 1.6389.

Watch Out For:

  • 1:30 am GMT: Australia MI leading index m/m