Summary:

• US dollar is on the back foot across the G10 space, Antipodean currencies on the rise
• US tax bill is going to be released later today (possibly at 3:15 pm BST)
• Donald Trump will announce the new FED chair at 8:00 pm BST

It’s going to be a big day for the US dollar as a long-awaited tax plan is to be revealed this afternoon and it could bring substantial repercussions both for the greenback and the US stocks as well. On top of this, the US President Donald Trump will announce his choice when it comes to the new FED chair where J. Powell is broadly expected to be named. A post of vice chair seems to be much more interesting and once Taylor is chosen, it could be conducive to the US currency as he’s seen the most hawkish one among all candidates.

After the Asian session the US dollar index is down 0.3% at the time of writing while the Antipodean currencies are on the rise despite upbeat remarks we got yesterday evening when the FED statement was published. Let us remind that the NZ dollar got a boost yesterday following the splendid jobs report which illustrated massive improvements across the board. Besides, the Australian dollar is trying to follow its NZ counterpart and it’s doing well rising as much as 0.55% against the greenback in the morning. The AUD was buttressed by the trade data released overnight which reported a much higher trade surplus than estimated. To be precise, a surplus amounted to 1.745 billion AUD while just 1.2 billion AUD was expected. Otherwise, building approvals picked up 0.2% yoy in September whereas the consensus had pointed to a 2.4% yoy decline.

The Australian trade data surprised to the upside in September. Source: Macrobond, XTB Research

Moving on, Thursday will be a pivotal day for US assets as we’ll know who will become the next FED chair, and more details on the US tax plan are going to be unveiled as well. As far as the new FED chair is concerned, it appears that markets have already priced in J. Powell but there still uncertain who could be a vice chair. Once Taylor is chosen, it could buoy the greenback, however Trump likes to take us by surprise, hence you never know what he’s going to say. On the flip side, we’ve been already offered some reports coming from WSJ suggesting that the White House has notified Federal Reserve governor Jerome Powell. The verdict is to be announced at 8:00 pm BST.

In addition, a tax bill will be revealed this afternoon (possibly at 3:15 pm BST) which will be closely watched by market participants. According to WSJ, the GOP is going to drop the corporate tax rate to 20% from 35% immediately, but the reduction would be temporary, as making the tax cut permanent would be too expensive under reconciliation procedures that Republicans are using to advance the bill without Democratic support. Hence, it seems that durability of CIT cuts could be a sticking point and might potentially weigh on the US indices.

The USDJPY failed to break its crucial resistance on Wednesday but another tries might be expected. Today’s events could be conclusive as for the future of the pair. Once 114.3 is beaten buyers could eye 115.5 as their next target. Source: xStation5