Dollar tumbles on FBI probe into Clinton's emails: Oct 31, 2016

Market Review - 29/10/2016 02:26GMT  

Dollar tumbles on FBI probe into Clinton's emails

The greenback tumbled broadly shortly after New York midday when FBI said they are reopening Clinton email investigation, Friday's broad-based decline ended recent dollar's winning streak despite upbeat U.S. Q3 GDP.  

Earlier, the Bureau of Economic Analysis said that GDP increased to a seasonally adjusted annual rate of 2.9% in the three month period from July to September, from the 1.4% expansion registered in the second quarter of 2016. That was its largest expansion since the third quarter of 2014. 

Versus the Japanese yen, although dollar climbed to a fresh 3-month high vs the Japanese yen at 105.53 after U.S. Q3 GDP reading exceeded market forecast, the greenback tumbled the most against the yen to as low as 104.47 on risk aversion when news of FBI has re-opened probe into Clinton's emails. 

The single currency traded with a firm bias in Asia and gained to 1.0925 in early European morning before easing off. However, euro found renewed buying at 1.0902 in Europe and rallied to 1.0950 in New York morning as data showed U.S. consumer spending slowed, despite a pullback, the pair later rallied to a 1-week high of 1.0992 on news of FBI's probe into Clinton's emails. 

Consumer spending pace slowed from the second quarter's robust 4.3 percent rate. Consumer spending, which accounts for more than two-thirds of U.S. economic activity, increased at a 2.1 percent rate. 

The British pound traded sideways in Asia and met renewed selling at 1.2188 in early European morning and tumbled to an intra-day low at 1.2113 ahead of New York open on news of Northern Ireland High Court Article 50 ruling. However, cable pared its losses and staged a short-covering rebound to 1.2187 in New York morning before retreating and later rallied to session highs of 1.2213 on usd's broad-based decline in New York afternoon. 

Northern Ireland High court said 'ruling on Royal prerogative use to trigger article 50 relates only to North Ireland law; is without prejudice to proceedings in England; not viable that Northern Ireland veto Brexit for all of the UK.' 

On the data front,the University of Michigan said that consumer sentiment fell to a seasonally adjusted 87.2, from 87.9 in the preceding month. 

Data to be release this week: 

New Zealand building permits, business outlook, Australia TD securities inflation, Japan retail trade, industrial production, construction orders, housing starts, Germany retail sales, U.K. mortgage approvals, Eurozone inflation, GDP, Italy CPI, producer prices, U.S. personal consumption, personal income, personal consumption expenditures, Chicago PMI, Dallas Fed manufacturing business index, Canada producer prices and raw material prices on Monday. 

Australia AIG manufacturing index, interest rate decision, Japan manufacturing PMI, interest rate decison, China non-manufacturing PMI, manufacturing PMI, Swiss retail sales, manufacturing PMI, U.K. manufacturing PMI, U.S. Redbook index, economic optimism and Canada manufacturing PMI on Tuesday. 

New Zealand unemployment rate, job growth, participation rate, inflation expectation, Australia building permits, Japan consumer confidence index, Italy manufacturing PMI, France manufacturing PMI, Germany manufacturing PMI, unemployment rate, unemployment change, Eurozone manufacturing PMI, U.K. shop price index, construction PMI, U.S. mortgage application, ADP employment change, ISM New York index and interest rate decision on Wednesday. 

Australia AIG service index, trade balance, imports, exports, China service PMI, Swiss consumer confidence, Italy unemployment rate, U.K. services PMI, BoE MPC vote, QE total, bank rate, Eurozone unemployment rate, U.S. initial jobless claims, labour costs, productivity, services PMI and factory orders on Thursday. 

Australia retail sales, Italy service PMI, France service PMI, Germany service PMI, Eurozone service PMI, producer prices, U.S. non-farm payrolls, private payrolls, manufacturing payrolls, unemployment rate, average earnings, participation rate, international trade, Canada, employment change, unemployment rate, participation rate, trade balance, exports, imports and Ivey PMI on Friday.