· The dollar was slightly weaker against the euro on Tuesday as investors squared positions after a three week greenback rally, and before three days of heavy data culminating in Friday’s employment report for September.
Stronger U.S. data along with the prospect of U.S. tax cuts and the likelihood of a further interest rate hike in December have boosted the U.S. currency in recent weeks.
The dollar index, which measures the greenback against a basket of currencies, remained at levels similar to the previous session. At 7:30 a.m. HK/SIN, the index stood at 93.603.
Among other currency majors, the Japanese yen traded at 112.84 per dollar The euro was last up 0.20 percent against the dollar at $1.17583.
· Traders and investors were also looking to add bets on possible divergence between the monetary policy outlooks in the United States and Europe, with expectations growing that the European Central Bank will adopt a more cautious stance.
· U.S. government debt yields were mixed Tuesday as investors turned their attention to the latest comments from a governor at the U.S. Federal Reserve.
The yield on the benchmark 10-year Treasury note sat lower at 2.332 percent at 1:07 p.m. ET, while the yield on the 30-year Treasury bond was up at 2.877 percent. Bond yields move inversely to prices.
· Looking to the U.S. central bank, Fed Governor Jerome Powell delivered remarks at a Reuters Conversation on U.S. financial regulation. The governor was confident watchdogs would reach an agreement to significantly reduce the burden of the so-called Volcker Rule banning banks from speculating with their own money, according to Reuters.
· President Donald Trump’s tax reform plan came under new criticism on Tuesday from two towering Wall Street figures, including billionaire investor Warren Buffett, who called into question a Republican drive to slash the U.S. corporate rate.
With the White House and top Republicans in Congress already on the defensive over claims the plan would not cut taxes for many middle-class Americans, Buffett and BlackRock Inc (BLK.N) Chief Executive Larry Fink suggested in separate interviews that the corporate rate may not have to be cut as deeply as proposed.
Fink said a corporate rate as high as 27 percent could satisfy U.S. businesses’ need for tax relief, while avoiding an increase in the federal deficit.
· Iraq stopped selling dollars to leading banks in Kurdistan and banned foreign currency transfers to the autonomous region on Tuesday, stepping up its retaliation for the Kurds' independence vote.
The financial sanctions follow a ban on direct international air travel to the region imposed by the central government on Friday.
· Japan’s services sector expanded in September at the slowest rate in 11 months as the pace of new orders eased, though a raft of other data suggest the economic recovery remains intact even as momentum may have ebbed slightly in the third quarter.
The Markit/Nikkei survey released on Wednesday showed its Japan Services Purchasing Managers Index (PMI) fell to a seasonally adjusted 51.0 from 51.6 in August.
· Oil prices dipped on Tuesday as speculators took profits for a second day after big third-quarter gains and on concerns that higher prices might spur increased U.S. shale production.
Brent crude futures LCOc1 closed down 12 cents or 0.2 percent to $56.00 a barrel, having lost almost 2.5percent on Monday. U.S. crude CLc1 futures fell 16 cents or 0.3 percent to $50.42.
Reference: Reuters, CNBC
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