Daily Morning Report 05.10.2017

The dollar edged higher against other major currencies on Thursday, as the previous session’s upbeat U.S. service sector data continued to support, while investors looked ahead to a number of speeches by Federal Reserve officials scheduled later in the day.

The greenback remained support after the Institute of Supply Management reported on Wednesday that U.S. service sector activity expanded at its fastest rate in 12 years in September.

The data came shortly after payrolls processor ADP said the U.S. private sector added 135,000 jobs last month, beating analyst’s projections.

But the greenback’s gains were capped amid speculation the next Fed head could be less hawkish than expected continued to weigh.

Fed Governor Jerome Powell and former governor Kevin Warsh were both interviewed at the White House last week to replace current Fed Chair Janet Yellen next February.

The two men are seen as serious candidates, but Powell is considered as more dovish than Warsh, who has criticised the Fed’s bond-buying programme in the past.

Powell was scheduled to speak about the Treasury Markets Practices Group at the Federal Reserve Bank of New York later Thursday, while Federal Reserve Bank of Philadelphia President Patrick Harker was also set to deliver a speech in Texas.

EURUSD eased 0.10% to 1.1749, while GBPUSD edged down 0.13% to trade at 1.3226.

Sentiment on the euro remained fragile amid ongoing political turmoil in Spain.

Spain’s King Felipe VI accused Catalan secessionist leaders of shattering democratic principles and dividing Catalan society on Tuesday, while the head of Catalonia’s government Carles Puigdemont said the region will declare independence in a matter of days.

Meanwhile, the Aussie dropped 0.50% to 0.7824 after the Australian Bureau of Statistics earlier reported that retail sales declined 0.6% in August, confounding expectations for a 0.3% rise.

On a more positive note, another report showed that Australia’s trade surplus widened to A$989,000 in August from A$808,000 in July, whose figure was revised from a previously estimated surplus of A$460,000.

Analysts had expected the trade surplus to widen to only A$875,000 in August.