The US dollar spiked this morning following news that the US Senate passed its version of the tax bill. While the dollar is stronger, its gains are fairly limited right now. Whether or not the House and the Senate versions of the tax bill can be successfully reconciled remains to be seen. On Friday, the dollar fell sharply after an ABC report. The news organization reported that Michael Flynn was prepared to testify that Trump directed him to make contact with Russia while he was a candidate. According to Reuters, this story was false and ABC's chief investigative correspondent has been suspended as a result. Our medium-term outlook on the dollar remains neutral.
USD/JPY is up sharply and currently trading just above 112.90. EUR/USD is down today and currently just above 1.1860. The pound is flat, with GBP/USD currently above 1.3450.
This week, we’ll see economic events including PMIs, nonfarm payrolls, and the US debt ceiling deadline. On Monday we’ll get factory orders. On Tuesday we’ll see Markit Services and Composite PMIs. We’ll also see ISM Non-Manufacturing PMIs. On Wednesday we’ll get ADP jobs and nonfarm productivity. On Thursday we’ll get initial jobless claims and consumer credit. The most important day next week is Friday. On that day, we’ll get nonfarm payrolls and find out if Congress is able to extend the debt limit. Last week, the Senate passed the tax bill, helping to stoke future inflation expectations.