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The dollar lost pips during the Asian session as traders priced in Powell’s likely nomination and trouble in GOP’s tax cut horizon.

Meanwhile, commodity-related currencies basked in positive reports from Australia, New Zealand, and oil speculations.

  • Australia’s trade surplus widens from 0.87B AUD to 1.75B AUD in September
  • Australia’s building approvals up by 1.5% vs. 0.9% decline expected, 0.1% growth in August
  • Japan’s consumer confidence up from 43.9 to 44.5 in October

Major Events/Reports:

Australia’s data releases

Things are looking up in the Land Down Under! Data printed earlier today saw Australia’s trade surplus DOUBLING to 1.75B AUD in September against expectations of a 1.20B AUD surplus and August’s downwardly revised 0.87B AUD figure.

Not only is this the largest surplus since May, but it also marks the longest stretch of monthly surpluses since early 1970s.

A closer look tells us that exports shot up by 2.9% while imports fell by 0.2%. We don’t have to look far for answers. Improvements in export were led by shipments of gold and iron ore, which isn’t surprising since Australia’s exports to China also rose by a whopping 36% from a year earlier. Wowza!

Australia’s building approvals also supported the Aussie by climbing by 1.5% in September when analysts were expecting a 0.9% contraction.

Approvals for private dwellings excluding houses (like apartments) rose 2.6%, while permits for private houses were 0.6% higher after dipping slightly in August.

U.S. tax and Fed pick rumours

As mentioned in the previous session recap, market players mostly shrugged off the Fed’s monetary policy announcement in favor of anticipating Trump’s Fed Chairman pick.

Market bees are still buzzing about the post being given to either Powell or Taylor, but today there were more speculations regarding the not-as-hawkish Powell and that took its toll on the Greenback. Word on the hood is that Trump is set to announce his decision on Thursday at 3PM ET.

It also didn’t help the scrilla that there are talks that the GOP would make the tax cut “temporary” so that they will expire in 10 years. Obviously, that didn’t go well with speculators who were betting on a longer-term solution from the U.S. lawmakers.

Major Market Mover(s):

USD

News of tax cuts possibly getting “phased out” in 10 years as well as rumors of a relatively dovish Fed pick took its toll on the Greenback.

EUR/USD is up by 34 pips (+0.29%) to 1.1655,
GBP/USD is up by 33 pips (+0.25%) to 1.3282,
USD/JPY is down by 25 pips (-0.22%) to 113.90, and
USD/JPY is down by 43 pips (-0.43%) to .9993.

Comdolls

Commodity-related currencies like the Aussie, Loonie, and Kiwi all received a boost one way or another. Australia had positive economic reports released, Kiwi continued its post-jobs data gains, and Loonie was supported by news that OPEC would extend its oil supply cuts through 2018. Oh, and the overall dollar weakness didn’t hurt either.

AUD/USD is up by 49 pips (+0.64%) to .7721;
AUD/JPY is up by 30 pips (+0.34%) to 87.86;
USD/CAD is down by 30 pips (-0.23%) to 1.2835;
CAD/JPY is up by 3 pips (+0.03%) to 88.74;
NZD/USD is up by 37 pips (+0.54%) to .6921, and
NZD/JPY is up by 26 pips (+0.33%) to 78.83.

Watch Out For:

  • 6:45 am GMT: Switzerland’s SECO consumer climate (0 expected, -3 previous)
  • 8:15 am GMT: Switzerland’s retail sales (y/y) (0.3% expected, -0.2% previous)
  • 8:15 am GMT: Spain’s manufacturing PMI (54.8 expected, 54.3 previous)
  • 8:45 am GMT: Italy’s manufacturing PMI (56.6 expected, 56.3 previous)
  • 8:50 am GMT: France’s final manufacturing PMI to remain at 56.7?
  • 8:55 am GMT: Germany’s final manufacturing PMI to remain at 60.5?
  • 8:55 am GMT: Germany’s unemployment change (-10K expected, -23K previous)
  • 9:00 am GMT: Euro Zone’s final manufacturing PMI to remain at 58.6?
  • 9:30 am GMT: U.K.’s construction PMI (48.3 expected, 48.1 previous)