Forex today: dollar corrects in an improved risk-on session
The FX space in the US session today saw a turnaround in the US dollar after recent negative catalysts such as Trump's jawboning and the US CPI miss last week failed to keep the bulls penned up.
While Trump's complaining about the dollar's strength was catching the market off-guard last week when he argued that the "strong dollar" was hampering the competitiveness of US firms, Treasury Secretary Steve Mnuchin said, in stark contrast to Trump, that he still expects a tax deal in 2017 while stressing the longer term benefits of dollar strength.
After opening the day at 100.51, DXY has been in a range of 55 pips on the 100 handle with a high of 100.55, picking back up to 100.33 at the time of writing. The US 10 year's day-range has been between 2.1966 - 2.2587, opening at 2.1966 and looking to closing up by 0.48% on the day at the time of writing. The euro has ben in a positive trend today trading within a 70 range albeit with the advance to highs of 1.0671 capped. The pound has moved up towards the 1.26 handle, falling just short by a number of pips and also was capped by the last minute flight to the dollar leaving the bulls ahead by 0.34% on the session so far - the cross was trading between 0.84611 - 0.84900, down 0.09% on the day. USD/JPY was a strong move to the upside from the lows of 108.12 to 109.06 the high and closing circa 0.30% higher for the session. The antipodeans had the Aussie leading, while the kiwi took the biggest knock in the greenback's correction. The bird is 0.14% up on the day though having traded between 0.6982 - 0.7036 while the Aussie is +0.15% having traded between 0.7565 - 0.7611.
The day ahead:
For the day ahead, we have the two key events, both at 0130GMT. First off we have data from China in the House prices while at the same time, the Reserve Bank of Australia will release their April meeting minutes.
Key US data coming up for the day ahead - Nomura
Key events from US session:
- US data reviewed: missing expectations - Nomura
- Fed's Fischer: Central banks should try to avoid surprises in conduct of policy
- Trump to nominate Quarles for Fed's top regulatory post - BBG
- Wall Street rises on improved risk sentiment
- US did not intervene in currency markets - U.S. Treasury's Mnuchin - FT