1. The lack of fresh developments on either North Korea and the succeeding FED chairman positions being filled, combined with the significant progress made on tax reform helped the U.S. dollar close out a strong week. The Dollar experienced the strongest gains against the New Zealand dollar and Japanese yen but none of the major currencies escaped its rally.
2. The most important event risk on next week’s calendar will be the highly anticipated European Central Bank monetary policy announcement. EUR/USD has traded in a narrow range ahead of the announcement as investors wonder whether it will be a hawkish or dovish taper. The euro was 0.15 % lower at $1.1769, extending losses from Friday when it lost 0.6 %.
3. The EURUSD has drifted lower from a 2-1/2-year peak of $1.2092 reached on Sept. 8, as hopes for the European Central Bank to take a more hawkish stance have been offset by speculation that it is not be in a hurry to discontinue its easy policy.
4. USD touched a three-month high against the yen on Monday, with an emphatic election victory for Japan’s ruling party keeping yen-weakening stimulus measures at the heart of government policy. The U.S. currency was up 0.25 % at 113.79, losing a bit of momentum after earlier touching 114.10, its highest since July 11.
5. Gold prices fell in Asia on Monday as the dollar showed strong gains after Japan’s Premier Shinzo Abe resoundingly won re-election, signaling continued easy policy. Gold prices continued falling on Friday, pressured lower by the stronger U.S. dollar which was boosted after President Donald Trump’s plans to overhaul the tax code cleared a critical hurdle. Prices are now at $1274