· The U.S. dollar fell on Monday after posting its biggest weekly rise this year last week as investors took profits and grew cautious amid news that President Donald Trump’s former campaign manager faces charges of conspiracy against the United States.
The caution was heightened by anticipation of a spate of U.S. economic reports due to be released this week and a meeting of the Federal Reserve’s policymakers Tuesday and Wednesday.
· “We didn’t see the dollar drop when the (Manafort) headline came out but I think it just provides more cautious undertones to what’s going on right now,” said Mizuho Corporate Bank currency strategist Sireen Harajli. “That does definitely play into it even if it’s not the full story.”
The dollar enjoyed its best week of the year last week and the risk-off environment Monday was prompting traders to sell the greenback and take those gains, Harajli said.
· The day’s risk aversion lifted the Japanese yen, often sought in times of geopolitical uncertainty, against the greenback. The dollar fell to a one-week low against the yen of 113.04 yen.
· The numbers: The Chicago PMI jumped to 66.2 in October from 65.2 in the prior month, on a scale where any reading over 50 indicates improving conditions. This is the highest level in six-and-a-half years. Economists has expected a decline to 62.
· U.S. consumer confidence jumped to a near 17-year high in October, with households upbeat about the labor market and business conditions, which could underpin consumer spending and boost the economy in the final three months of the year.
The Conference Board said its consumer confidence index increased 5.3 points to 125.9 this month, the highest reading since December 2000.
· U.S. Republicans on Tuesday appeared to be nearing a deal on state and local taxes that would preserve a federal deduction for property taxes but not income taxes, potentially removing a major obstacle that could derail their impending tax overhaul plan.
Republican Representative Tom Reed of New York said the “sweet spot” compromise was gaining support among high-tax state lawmakers who have signaled their opposition to a proposal to repeal the state and local tax, or SALT, deduction.
The SALT compromise would reduce, but not eliminate, a disproportional tax impact on upper middle-class families in high-income tax states such as New York, New Jersey and California. Those states send enough Republicans to Congress to derail a tax bill.
If a SALT deal enables Republicans to pass tax legislation, it would be Trump’s first major legislative achievement since he took office in January, with Republicans controlling both chambers of Congress.
· President Donald Trump brushed off the first indictments in the probe of his campaign’s ties to Russian election meddling, but the charges sent a clear signal to the White House and other Trump associates: Robert Mueller means business.
By going after Trump’s campaign manager and another aide on money-laundering charges and securing a guilty plea from a third campaign adviser, the special prosecutor showed he would delve deeply into the past in search of criminal activity and use his broad powers aggressively.
That left some Trump associates worried about what or whom Mueller would target next, despite the White House’s public dismissal of the developments as unrelated to the president and his campaign
· Manafort and Rick Gates are charged with money laundering, tax fraud, conspiracy to defraud the United States, and other counts. They pleaded not guilty on Monday.
The indictments, which closely detail the alleged crimes, appeared to be an opening salvo from Mueller.
Trump has denied any collusion with Russia and at times described the investigation as a “hoax” and a “witch hunt.”
Russia has denied interfering with the 2016 election.
· In a New York Times interview in July, Trump indicated that Mueller would be crossing a red line if he investigated Trump’s family business.
Legal experts said Mueller would not be swayed by Trump’s view of the proper scope of the investigation.
· Oil prices settled higher again on Tuesday, notching a monthly gain of more than 5 percent, but analysts said bullish sentiment that has driven Brent crude to its highest in more than two years could encourage U.S. producers to export more oil.
Brent LCOc1 settled up 47 cents or 0.7 percent to $61.37, close to its July 2015 highs reached earlier this week, and up around 37 percent from its 2017 lows hit in June.
U.S. West Texas Intermediate crude (WTI) CLc1 settled up 23 cents or 0.4 percent to $54.38, still near its highest since February and close to its highest in more than two years.
· A driver in a rented pickup truck mowed down pedestrians and cyclists on a bike path alongside the Hudson River in New York City on Tuesday, killing eight people and injuring about a dozen others in what authorities said was an act of terrorism.
Reference: Reuters
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