Markets await Trump’s tax reform

The US dollar rallied against a number of currencies yesterday at the prospect of Donald Trump’s speech on tax reform today. The end result saw cable changing hands below 1.34 for the first time in a fortnight. The next key resistance level will be 1.3280. The Euro also saw a weaker tone against the US dollar with recent dovish Draghi comments on a surprising German election result forcing some profit taking in the currency.

Previous Day's Market Highlights

The US dollar rallied against a number of currencies yesterday at the prospect of Donald Trump’s speech on tax reform today. The end result saw cable changing hands below 1.34 for the first time in a fortnight. The next key resistance level will be 1.3280. The Euro also saw a weaker tone against the US dollar with recent dovish Draghi comments on a surprising German election result forcing some profit taking in the currency.

The Pound’s gains have stalled off the back of Donald Tusk’s comments on Brexit, saying “there is no sufficient progress yet” in terms of negotiations.

Currency Pairing 08:00 Today Vs 08:00 Yesterday Four-Week High Four-Week Low % Change
GBP / EUR 1.1389 1.1417 1.0745 5.89%
GBP / USD 1.3383 1.3664 1.2777 6.49%
EUR / USD 1.1750 1.2093 1.1773 2.65%
GBP/AUD 1.7036 1.7050 1.6165 5.19%
GBP / NZD 1.8613 1.8742 1.7684 5.65%
GBP / CAD 1.6574 1.6728 1.5837 5.33%

Today's Market Highlights

We start today with a quiet calendar before it heats up in the afternoon session, as data arrives from across the pond. The first release of key data is Core Durable Goods Orders (13:30 BST), expected to uptick by 0.2 per cent from 0.6 per cent m/m previous. We then have Pending Home Sale data (15:00 BST), forecasted to decline 0.5 per cent m/m in august.

Shortly afterwards we have US Crude Oil Inventories (15:30 BST), expected to show stockpiles have risen for a fourth straight week by 2.9M.

From Canada, Govender Poloz will deliver an economic progress report followed by a news conference (16:45 BST), where his comments will be closely monitored. Then we revert our attention back to the US for what may diminish the day’s activities, as Donald Trump delivers his tax reform plans (17:00 BST). The markets will home in to this speech, which could bring with it volatility.

As the day draws to a close, the overnight session will deliver New Zealand’s Cash rate (21:00 BST), where analysts expect no change and for the rate to be held at 1.75%.

Today's Economic Calendar

Time Currency Release Consensus Previous
9:00 CHF Credit Suisse Economic Expectations 25.0
EUR M3 Money Supply y/y 4.6% 4.5%
EUR Private Loans y/y 2.7% 2.6%
11:00 GBP CBI Realised Sales 6 -10
13:30 USD Core Durable Goods Orders m/m 0.2% 0.6%
USD Durable Goods Orders m/m 1.0% -6.8%
15:00 USD Pending Home Sales m/m -0.5% -0.8%
15:30 USD Crude Oil Inventories 2.9M 4.6M
16:45 CAD BOC Gov Poloz Speaks
19:00 USD FOMC Member Brainard Speaks
21:00 NZD Official Cash Rate 1.75% 1.75%
NZD RBNZ Rate Statement