· The U.S. dollar weakened on Wednesday as investors repositioned ahead of Friday’s highly anticipated jobs report, but pared losses on a strong non-manufacturing report.
The dollar index .DXY was last down 0.7 percent at 93.479, after earlier falling as low as 93.259. Among other currency majors, the Japanese yen traded at 112.85 to the dollar, while Euro at $1.17547.
· Improving U.S. data along with the prospect of U.S. tax cuts and the likelihood that the Federal Reserve will raise interest rates in December have boosted the U.S. currency in recent weeks.
· Traders have been cautious this week on the greenback, however, on concerns that recent hurricanes may hurt last month’s hiring report.
· The dollar pared losses after the Institute for Supply Management’s non-manufacturing index rose to its highest level since August 2005 in September and the prices paid index reached its highest level since February 2012.
· Other data showed that U.S. private employers added 135,000 jobs in September, topping economists’ expectations even as Hurricane Harvey and Irma “significantly impacted smaller retailers.”
· Interest rate futures traders are now pricing in an 83 percent likelihood of a December rate increase, up from 78 percent on Tuesday, according to the CME Group’s FedWatch Tool.
· Federal Reserve Chair Janet Yellen said the U.S. central bank has been working to ensure that regulations are tailored to the size, complexity and roles of the lenders it oversees.
“For community banks, which by and large avoided the risky business practices that contributed to the financial crisis, we have been focused on making sure that much-needed improvements to regulation and supervision since the crisis are appropriate and not unduly burdensome,” Yellen said Wednesday.
Yellen didn’t discuss her outlook for interest rates or the economy in her prepared remarks.
· The U.S. budget deficit is proving to be a major obstacle to the tax reform plan being offered by President Donald Trump and top congressional Republicans, with one leading Senate hawk saying a week after the plan was introduced that any enlarging of the fiscal gap could kill his support.
· Oil prices fell on Wednesday after a surprising jump in U.S. crude exports to a record 2 million barrels per day fanned worries about global oversupply. U.S. crude stockpiles fell sharply last week, but crude exports rose to 1.98 million bpd, the Energy Information Administration said. [EIA/S]
WTI CLc1 settled down 44 cents to $49.98 a barrel while Brent LCOc1 fell 20 cents to $55.80 a barrel.
Reference: Reuters, CNBC, Bloomberg
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