U.S. Dollar Steadies with Progress in GDP and Inflation 

The U.S. Dollar remains in positive ranges against most major currencies following news of tax reform advances in the Senate as well as optimism from Jerome Powell’s confirmation hearing.

USD

The soon to be head of the Federal Reserve spoke of maintaining a friendly financial environment in which he would not push for further regulations. Unsurprisingly, this pushed equity markets to new record highs and the greenback saw a bit of benefit.

Second revision of Gross Domestic Product growth revealed a faster pace than expected at 3.3% over 3.2% while Core Personal consumption Expenditures rose by 1.4% also exceeding its estimate of 1.3%. Personal Consumption was also near its predicted expansion at 2.3%, all signs that the Fed may be right in desiring to hike further after December. Pending Home Sales are scheduled for 10AM.

 

CAD

The Canadian Dollar has lost over 1.0% of its value in the past week as economic momentum is halted for our neighbor up north. The “loonie” suffered a bit during last month’s NAFTA negotiations that rattled officials from both Canada and Mexico as they try to maintain the agreement to minor adjustments.

Additionally, the non-energy sector of the economy is muted while oil dynamics have changed with sanctions and new technologies. Yesterday’s financial statement from the Bank of Canada also highlighted problems with indebtedness as a result of home lending growth. Financial vulnerability will be a cloud on the prospect of Canadian Dollar appreciation moving forward.

 

GBP

The Pound rose yesterday afternoon after a report claimed that UK officials had reached an agreement with their EU counterparts as to the amount to be paid for Brexit to continue. A figure of GBP 60.0 billion was rumored to be the toll the government was willing to put forward.

Nevertheless, nothing has been reassured or confirmed from authorized parties, but the development certainly means that Brussels is open to get the wheels moving with now money on the table. Sterling is now at its highest level in two months, but the Irish border issue remains a thorn with a more complicated path to resolution.