What’s next? – USDJPY 08.12.17

The dollar was trading 0.31 percent higher vs the Japanese yen at 113.44 as of 06:50 GMT on Friday, despite better-than-expected economic data in Japan boosting the yen.

Japan’s current account came in at 2.176 trillion yen for October, above an estimated 1.930 trillion seen, but down from a previous month 2.271 trillion.

In other news, Japan’s third-quarter gross domestic production was revised upwards to 0.6 percent quarter-over-quarter and 2.5 percent year-over-year. In both cases, data outperformed economists’ predictions of 0.4 percent and 1.5 percent respectively.

The American currency remains supported by rising speculation that the US Senate and House of Representatives will soon agree on a joint resolution over a massive tax reform.

The US dollar index, which measures the greenback against six major currencies, was trading at 93.86 by the time of this writing, up 0.10 percent.

According to the Trump administration, cutting taxes will allow citizens to have more cash in their pockets, boosting consumption and inflation, and also attract companies to relocate profits.

Also supporting the greenback were reports on a deal between Senate and House Republicans to pass a bill that would allow to skip a government shutdown in the upcoming days.

On the data front, the US Labor Department said initial jobless claims stood at 236,000 last week, below an estimated 240,000 and a previous week 238,000.

Ahead in today’s session, focus will be at fresh labor market data, including the unemployment rate, average hourly earnings and most importantly, nonfarm payrolls for November.

Fed funds tracked by CME Group’s FedWatch tool show participants weighing in a nearly 100 percent chance of a 25 basis points rate hike at the December 13 monetary meeting.

Fort Financial Services