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All eyes now on tonight's U.S. consumer price report


The Australian dollar tracked sideways through much of the domestic trading session on Wednesday holding onto to gains above 0.80 U.S cents. With little domestic data on hand to drive direction investors seemed content in managing positions ahead of a busy macroeconomic docket. Having touched intraday highs at 0.8044 the AUD then suffered at the hands of renewed USD demand. Reports Trump and republicans are attempting to fast track key tax reforms, chasing a bipartisan agreement to ensure support and success through the house bolstered the world’s base currency and fostered widespread gains across most major currency counterparts. Slipping back below 0.80 and opening this morning at 0.7984 attentions turn to key domestic labour market data and headline U.S inflation numbers for direction into Friday and the weekend. 

The New Zealand Dollar maintained its sideways range over the past twenty-four hours as it again could not push through the 0.73 handle against the US Dollar. Opening at 0.7285, the Kiwi saw an intraday high of 0.7303 after a stronger NZ FPI number in the morning before pulling back to 0.7220 on broader greenback strength in overnight trading. With a lack of domestic data, markets will focus on the upcoming Inflation reading in the Unites States as the New Zealand Dollar opens this morning at 0.7245.

The Great British Pound treaded water in overnight trading, oscillating between a low of 1.3186 and a high of 1.3328 to open this morning stagnant at 1.3205. With the broader narrative of the Bank of England reviewing their monetary policy on the cards tonight, Traders have taken a wait and see approach this morning with the Sterling trading within a tight range. Despite strong inflation data and a fall in unemployment, the UK experienced slow wage growth further exacerbating consumer spending numbers and undermining the case for interest rate tightening. While the Bank of England is expected to hold interest rates at 0.25% tonight, pundits look forward to a potentially important Policy Statement for direction on the domestic front. 

The greenback closed marginally higher again overnight when valued against most of its major rivals. The greenback rallied following the lead of US Treasury yields and President Donald Trump's promise of lower corporate taxes. There was no official announcement from the President with all messaging coming from President Donald Trump’s twitter account. Yesterday the only U.S. data release was monthly producer price index. U.S. producer prices rebounded in August driven by a surge in the cost of gasoline. The result was below market's expectations albeit lifting by 0.2%. All attentions now turn to the release of today’s consumer price report for August which should be stronger with Hurricane Harvey driving up gas prices last month. A strong result could certainly extend the USD rally.