GDP trumps expectations

The dollar’s strong run this week continues this morning as preliminary Q3 GDP figures leapt ahead of expectations. The US economy’s now growing at a 3.0% clip on an annualized basis, well ahead of expectations. While the next few iterations of the Q3 numbers will be revised due to hurricane impacts, data inaccuracies and a wider sample, the initial signs are strong. Exports, investment and personal consumption all made material contributions to today’s growth number, but hangovers from real estate and government spending could hold back further growth in the final months of 2017.

The dollar’s added to yesterday’s gains, sending EUR/USD below 1.16 for the first time since July.

Spoiling for a tax fight

With healthcare reform taking a backseat, tax policy is now the political hot potato as the GOP representatives in the House narrowly approved the Senate’s budget by just four votes. Despite the Democrats now effectively sidelined, the Republicans still face an uphill battle to get the tax code rewritten. The key details of the bill itself are still relatively shrouded, with a number of key lawmakers still stating that 401(K) contributions could still be adjusted despite Trump’s promises to protect the plan. Still, yesterday’s vote still marks progress for the policy shift which has proved dollar positive in the short term – a pattern that’s repeated itself this morning.

In equity markets, there were further reasons to be bullish on the greenback as earnings results from Alphabet (parent company to Google), Amazon, Microsoft and Twitter firmly beat expectations – comfortably setting up another run on all-time highs for stock market indices.

Global politics somehow continues to surprise

After the political shocks of 2016, you’d have thought global politics had run out of surprises, but apparently not. Today that comes courtesy of Australia after the ruling government lost their single seat majority. The deputy prime minister Barnaby Joyce has been ruled ineligible to stand for parliament after ‘forgetting’ he was half Kiwi. With a by-election now looming, the government looks fragile and opposition parties have the perfect excuse to trigger a no confidence vote.

The AUD trades weaker, with AUD/USD touching early-July lows overnight.

The day ahead

The rest of the day is somewhat quieter, but University of Michigan Consumer Sentiment figures could draw interest.

Have a great day and a better weekend.