Forex today: FX investors not so convinced and dollar takes a month end hit

Ross J Burland FXStreet

The US dollar was on the back-foot today with profit taking and scepticism over how the tax cuts can really help the economy.

The Trump trade still shines through on Wall Street though with the small caps and banks moving higher again while Forex today was topsy-turvy over the implication of the tax cuts and what it all means for fiscal expansion and the U.S. dollar.

EUR/USD was higher by +0.33% closing at 1.1786 with an ununified ECB and traders tiring chasing the bid on the prospects of a taper QE not disappearing over the horizon. GBP/USD was higher by +0.43% after a bullish and hawkish BoE's Haldane, shrugging off the earlier remarks from BoE's governor Carney suggesting MO cannot be the solution for post Brexit lower real incomes.

The cross, EUR/GBP's recent quest for higher grounds in a correction of the slide from 0.9000 and full reversal of the 0.8783 lows was capped as Sterling rates preferable to that of the EZ's in wake of coalition government in Germany and CPI misses across the majority of the 16 states of Germany. ECB's Praet was advocating for recalibration and not an exit an additional weight to the euro. As far as the yen, USD/JPY bulls were unable to stay above the 118 handle and closed -0.42% at 112.37 and well below the critical 112.80 support. Copper and the VIX were a driver for the antipodeans and AUD/USD closed +0.08% at 0.7854 while the Kiwi was higher by 0.51% at 0.7235. USD/CAD closed lower by -0.34% at 1.2434 despite WTI profit taking.

Key notes from US session

Key events in Asia

NZ building permits.

Japanese CPI and IP.

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

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