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The possibility of a less hawkish Fed Governor sent the dollar lower across the board, enabling comdolls like Aussie and Kiwi to recover from their lows.

  • China’s banks still closed for holiday
  • Japan’s Nikkei/Markit services PMI falls from 51.6 to 51.0 in September
  • Japan’s Nikkei/Markit composite PMI also slips from 51.9 to 51.7
  • U.K.’s BRC shop price index (y/y) slips by 0.1% vs. 0.3% decline in August
  • AU AIG services index slips from 35.0 to 52.1
  • NZ ANZ commodity prices inches 0.8% higher vs. 0.8% decline in August

Major Events/Reports:

Dollar drops in early Asian session trading

The biggest story of the hour is the dollar dropping against its major counterparts on speculations that the POTUS would pick a less hawkish Fed Governor next year.

For newbies out there, you should know that FOMC head honcho Janet Yellen’s term will end in February. Word around the hood is that U.S. Treasury Secretary Steven Mnuchin favors a slightly-less-hawkish Fed Governor Jerome Powell over former governor Kevin Warsh, who is reportedly a bit more hawkish than Yellen.

There wasn’t much follow through with the dollar’s selling, however, thanks to a lack of other catalysts that kept other traders in the sidelines.

Extended risk appetite

With three of the major U.S. indices hitting significant highs yesterday, Asian session traders did their best to catch up. Seems like optimism on global economic growth as well as a lack of geopolitical news *cough* North Korea *cough* have boosted confidence on equities.

  • Nikkei is up by another 0.23% to 20,662.00;
  • Australia’s A SX 200 – hit by lower oil prices – is down by 0.71% to 5,660.90;
  • Hang Seng is up by 0.77% to 28,389.00.

Commodity prices were a little more mixed with

  • Gold rising by 0.29% to 1,278.28 and
  • Silver inching 0.64% higher to 16.757 while
  • Brent crude oil is down by 0.68% to $55.62 and
  • U.S. WTI is down by 0.85% to $49.99.

Major Market Mover(s):

USD

The Greenback slipped in early Asian session trading, as traders digest the possibility of a less hawkish Fed head by next year.

EUR/USD is up by 20 pips (+0.17%) to 1.1768;
USD/JPY is down by 18 pips (-0.16%) to 112.68;
GBP/USD is up by 24 pips (+0.18%) to 1.3266; and
USD/CHF is down by 12 pips (-0.12%) to .9724.

NZD

Kiwi started the session strong on the back of overall dollar weakness and a bit of risk appetite, but surprisingly weak dairy auction results eventually dragged the comdoll lower.

NZD/USD shot up to a session high of .7206 before falling back down to .7180;
NZD/JPY rose to 81.13 before falling back to 80.91, and
AUD/NZD fell to 1.0920 before recovering to 1.0943.

Watch Out For:

  • 7:15 am GMT: Spain’s services PMI (55.5 expected, 56.0 previous)
  • 7:45 am GMT: Italy’s services PMI (54.8 expected, 55.1 previous)
  • 7:50 am GMT: France’s final services PMI to remain at 57.1?
  • 7:55 am GMT: Germany’s final services PMI expected to stay at 55.6
  • 8:00 am GMT: Euro Zone’s final services PMI also seen to remain at 55.6
  • 8:30 am GMT: U.K.’s services PMI (53.2 expected and previous)
  • 9:00 am GMT: Euro Zone retail sales (0.3% expected, -0.3% previous)