US dollar recoups most of its losses
It's turned into one of those days for the US dollar. It was kinda weak early but it's been kinda strong late. Neither move had a particular theme behind it or any real gusto.
Three stories have had the limelight
1) China
The Communist Party Congress begins next week and the thinking is that Chinese officials want to see some yuan strength at the outset. In two days of trading this week, USD/JPY is down 1.3%
2) Tax worries
The ebb and flow on the tax trade will be a major driver of the US dollar for months. The latest is that Trump is in a spat with Republican Senator Bob Corker that started with the latter's insistence on avoiding creating more debt.
3) Bonds
US 10-year yields sank as low as 2.31% early but have battled back to 2.34%. Last week, Bill Gross highlighted 2.40% as a pivotal long-term level so that's the line in the sand to watch.
