The US House of Representative voted by an overwhelming majority to reopen the US Government and raise the debt ceiling bringing an end to the impasse that had kept markets on tenterhooks albeit temporarily.
That has given the USD a slight prop against all the majors including the commodity currencies as focus now turns to the release of US data over coming sessions. Although tapering has been pushed back somewhat due to the shutdown, players reckon it will happen in Q1 2014 as the Fed Beige Book saw steady growth between Sep & Oct which will provide support to the Greenback. Not much action likely from the EUR with only EMU c/a f/c at a surplus of Eur18.0 bln(16.9) on tap.
UK retail sales f/c at 0.4% m/m(-0.9) will dictate Cable’s near term direction. A slew of US data will make for a volatile session with claims f/c at 335K(374), housing starts f/c at 910K(891), ip f/c unchanged at 0.4% & Philly Fed Index f/c at 15.5(23.3). Canadian International Sec Trans f/c also on tap. Fed Evans, Kocherlakota, George & Fisher and EU Rehn speaking.
Early reaction in Asia has been to look for value to place USD in KRW/MYR/INR/CNY
G10 looks a little confused as the initial rush to buy USD will be tempered by the attraction to sell JPY and CHF as safe haven unwind will begin.Aud in this space should continue to attract buyers.