US Retreats amid Political Troubles, Fed Chair Uncertainty

The US dollar retreated today following the last week’s rally. Political issues in the United States overshadowed Monday’s positive macroeconomic data, sending the US currency down.

Just when it looked like the political situation improves for US President Donald Trump as he was getting closer to fulfilling one of his election promises, a tax reform, a new development occurred in the investigation of supposed ties between Trump’s election campaign and Russia. Three of Trump campaign key aides were indicted, one of whom pleaded guilty to lying to FBI about his contacts with Russians who apparently have close connection to the Russian government.

Adding to factors hurting the greenback was the question of who will take the seat of Federal Reserve’s Chair. According to rumors, between two remaining candidates, dovish Jerome Powell and hawkish John Taylor, Powell has higher chances of getting the office.

As for economic data, both personal income and spending rose in September. In particular, spending climbed 1.0%, which was a higher rate of growth than predicted 0.8%.

EUR/USD rose from 1.1604 to 1.1655 as of 19:40 GMT today. GBP/USD rallied from 1.3128 to 1.3207. USD/JPY dropped from 113.74 to 113.17.

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