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Aussie Flat In Early Asia Ahead Of Q3 GDP

12/6/2017, 10:56:25 AMMarket Analysis
Aussie Flat In Early Asia Ahead Of Q3 GDP

The Aussie was quoted flat in early Asia on Wednesday ahead of third quarter GDP estimates that lag a central bank policy review earlier this week that noted "forward-looking indicators being more positive than they have been for some time."

Australia reports third quarter GDP with a 0.7% rise seen on quarter and a 3.0% pace on yearAUD/USD traded at 0.7607, down 0.01%, while USD/JPY changed hands at 112.59, down 0.02%.

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. 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