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Dollar traders are sitting at the edge of their seats, waiting for Trump’s announcement on his Fed head pick, while the pound and Kiwi continued to tumble on earlier catalysts.

  • U.S. initial jobless claims down from 244K to 222K vs. 240K forecast
  • Philly Fed manufacturing index climbed from 23.8 to 27.9 vs. 21.9 consensus
  • U.S. CB leading index posted 0.2% decline vs. projected 0.1% uptick
  • German Chancellor Merkel: Brexit progress not enough to move to Phase 2
  • BOE MPC member Cunliffe: Still not seeing sustained domestic inflation pressure
  • Trump leaning toward Taylor or Powell as next Fed head?

Major Events/Reports

Remarks from Merkel and Cunliffe

As though the disappointing retail sales report wasn’t a big enough blow on the pound, the currency took a couple more hits from Merkel’s remarks in Brussels and BOE policymaker Cunliffe’s testimony.

According to the German Chancellor, there hasn’t been enough progress made in Brexit talks for it to proceed to the next phase of negotiations. Nonetheless, she still expressed hope that this can be reached by December, something that was echoed by other EU leaders present in the summit.

As for BOE MPC member Cunliffe, he pointed out that he has yet to see signs of sustained domestic inflation pressure and said that the timing of future hikes is an “open question.”

Although he did acknowledge that the economy is growing and that the jobs situation is improving, he clarified that they are not seeing upward pressure on wages and that the inflation they are getting is coming from abroad due to sterling depreciation.

All eyes on Trump’s Fed pick

There wasn’t much buzz after Trump’s recent sit-down with current Fed Chairperson Yellen, leaving a cliffhanger episode for dollar traders eagerly awaiting who the Donald will hire.

The White House did recently say that an announcement will be made in the “coming days” but some predict that it’s unlikely to happen this week. A report on Politico suggested that the President is still leaning toward one of the initial front runners, Powell, but has also thrown Stanford economist John Taylor’s name in the hat.

According to White House spokeswoman Natalie Strom, the candidates are at the same level of consideration for now and that the President has great respect for them all. Not helping.

Major Market Mover(s):

GBP & NZD

These two were already on weak footing in the previous trading sessions and were unable to find solid ground throughout the day.

GBP/JPY pulled up to 148.63 but eventually fell back to a low of 147.95, NZD/JPY consolidated briefly above 79.00 then dropped to 78.85, GBP/AUD tumbled to a low of 1.6689, NZD/CAD is down to .6836, and GBP/NZD is up to 1.8787.

Watch Out For:

  • 3:00 am GMT: NZ credit card spending y/y (6.4% previous)