It has been a very quiet start to the week. The holiday season and a lack of news have meant little movement in markets, especially currencies.
Trump is in the headlines again, with attention drawn to his team’s conversations with Russian officials prior to the Presidential election. The market has given a collective yawn to all this as we’ve been down this road before. More importantly for the market in the weeks ahead, US politicians have returned from a mid-summer break, and focus has returned to getting the health care bill passed, which would allow some progress towards tax reform. It all continues to look messy. The key Republican players are optimistic that tax reform can happen this year, but others are calling it a train wreck.
At present, all major currencies sit within 0.1% of their Friday New York closes, except for NOK. Norway CPI inflation was higher than expected, increasing the probability that the trough in the policy rate has been reached – add Norway to the growing list of central banks with policy at an inflexion point. NOK has gained about 0.5%, taking USD/NOK down to 8.325.
The NZD has traded in a tight 20 pip range and sits at 0.7275. NZD/AUD has traded in a tight 30 pip range and sits at 0.9560. I’ll spare the details on all the other currencies, with little movement seen across the board.
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