The House of Representatives voted on Monday to begin negotiations with the Senate, which brought the Republicans one step closer to reform. However, the last stage can also be stretched, especially if a cycle of revisions and approvals begins between the chambers. Major buoyancy about the reform was priced in the dollar after influential Republican John McCain became supporter of the reform.
The macroeconomic front pleased with data on manufacturing sector. Factory orders decreased by only 0.1% after a jump of 1.7% in September. Such figures are consistent with an upward trend in the industry, as well as an increase in the capex of American firms looking forward to a gift from the White House in the form of a tax reform.
The British pound remains highly vulnerable to reports regarding the progress of the EU-UK talks. High led to rising attraction of the pair among speculators, which caused GBPUSD's rise on Monday to 1.3538 against the background of planned negotiations between Prime Minister Therese May and European Commission President Jean-Claude Juncker. On Tuesday, the pair sank to the level of 1.3400, as the parties could not agree on the issue of Irish borders. As already mentioned earlier, the mid-term picture of GBPUSD looks very uncertain due to the prospects for strengthening of the dollar and significant hopes for progress in the Brexit negotiations, which can bolster activity on sterling.
Australian dollar rose on positive data about retail sales. Australian consumers revived demand amid rising to 2% level and stable wage dynamics. AUDUSD practically left invisible in its dynamics the RBA decision to leave the interest rate unchanged at 1.5%.
This analysis is provided as general market commentary and does not constitute investment advice.