Aussie Drops After Q3 GDP Figures Disappoint, Geopolitical Risks Noted
The Aussie fell after third quarter GDP estimates came in weaker than expected even though the data lags more timely figures such as wage growth.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was last quoted up 0.24% to 93.27.
Yonhap reported that US B1 bombers plan flights over the Korean peninsula Wednesday as part of an annual military exercises that rile Pyongyang. The week-long drills come a week after North Korea tested what it called its most advanced ICBM and warned that the exercises would push the Korean peninsula to "the brink of nuclear war."
Elsewhere, Sky News reported that an Islamist suicide attack was planned against Downing Street and British PM Theresa May, but was foiled by police and security services.
There was little immediate reaction to reports that Deutsche Bank (DE:DBKGn) received a subpoena from US special counsel Robert Mueller related to his Russia election meddling investigation and the bank's business with President Trump.
Jay Sekulow, one of Trump's personal lawyers, said Deutsche Bank has not received any subpoena for financial records relating to the president as part of Mueller's probe.
"We have confirmed that the news reports that the Special Counsel had subpoenaed financial records relating to the president are false,” Sekulow said. “No subpoena has been issued or received. We have confirmed this with the bank and other sources."
Overnight, the dollar rose against a basket of currencies on Tuesday as ongoing optimism over the progress of tax reform offset weaker-than-estimated service sector data.
With the Senate and House of Representatives set to get talks underway this week to reconciled their respective bills, investors remained optimistic that the final bill will reach President Donald Trump for approval before year-end.
The tax cuts, widely viewed as inflationary, continued to spur an uptick in the dollar, offsetting economic data showing US services activity in November fell short of expectations.
The Institute for Supply Management's non-manufacturing purchasing managers' index showed a reading of 57.4 for November compared to 60.1 in October, missing economists' expectations for a reading of 59.
Some market participants warned, however, that markets could behave “irrationally” amid ongoing changes to tax bill.
For the second day in a row, euro weakness supported an uptick in the dollar as the single currency struggled to pare losses despite upbeat services PMI data.
The euro and pound continued to come under pressure a day after news reports emerged that Britain and the EU failed to reach an agreement to move to the next stage of Brexit talks.
The positive sentiment on riskier assets, meanwhile, helped the greenback add to gains against both the safe-haven yen and Swiss franc