Daily FX Wrap: Greenback buying dictates the afternoon

GBP was in focus this morning, as added attention was placed on sterling following the CPI beats seen yesterday. The optimism was short-lived however, with both average earnings missing expected, yet still in-line with previous.

US PPI was the second piece of tier 1 data on the slate, markets seemingly rebuffing the marginal miss on the headline. The DXY did see some volatility post news however, finding some optimistic bids, looking to reclaim the 92.00 handle. As the index approached 92.00, the USD buying aggression increased, with the greenback gaining some ground against its major pairs, trading though the level in the afternoon.

BAML stated that buying points to an upside for the USD against GBP, EUR, CAD, citing its orderflow model of interbank FX flows. Bank commentary around the greenback circulated, as SEB FX strategists were the latest to comment, stating that they would use levels above 1.21 to initiate a short EUR/USD trade as they expect EUR/USD to decline towards 1.17 in 3-6 months.

The USD’s buying theme was aided with confidence out of Washington in regards to the upcoming Tax Reform, with comments from Ryan stating he is personally confident that Trump will push for conservative tax reform. Ryan followed earlier reports stating that a republican 'consensus' tax plan will be released in the week of 25/September.

JPY briefly held against the USD bulls, as a battle to firmly clear the 110.10 area begun. The Yen’s protection showed in both EUR/JPY and GBP/JPY, as both pairs printed fresh session lows into the US cash equity open. USD found some aggression as the aforementioned tax positivity helped break the 92.00 DXY handle, evident in USD/JPY with September’s 110.50 high now a target.

13 Sep 2017 - 15:32- ForexData- Source: RANsquawk

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