The US dollar’s recent strength has been dented as the Euro and Sterling find reasons to rebound, and all of this despite the markets expectation that the Fed will raise rates in December. Fed Minutes come out later today and should  shed more light on the expected rate rise and detail the account of the policy meeting that sparked the rally back in September. Most economic indicators are expected to have risen in September but the Hurricane season has sent recovery costs at a Federal level through the roof. The debt pile continues accelerating, outpacing the repayments.

The President must get Congress to approve increased spending. Anyone saying ‘no’ will, no doubt, now be lambasted on Twitter for strangling aid to fellow Americans recovering from nature’s wrath. The gains by European currencies can be attributed to both data and news flow. Political risk has been the prime source of risk for GBP in recent weeks, and it would appear that market participants view the GBP more favourably when UK PM May is seen as more secure alongside U.K. data that appears to be supporting the case for a November rate increase from the Bank of England.  Sterling’s rally took this week’s gains to around 1 percent, as Manufacturing, Industrial production and Construction Output all beat forecasts. The data still showed a mixed picture for the U.K. economy as the nation’s trade deficit increased to the most in almost a year thanks to  higher imports.

Elsewhere, the Euro’s gains are coming on the back of more positive economic data out of the Euro-Area. Germany’s Industrial Production hit a six-year high in August and its trade surplus was higher too (quite an achievement given how strong the euro has been year-over-year).  All in all, there has been little to suggest that the European Central Bank won’t announce a taper to its QE program at its October 26 meeting. Meanwhile, back in the US, 254 days in to Trumps Presidency how is it looking?  Wall length: 0,  Tax reforms: 0,  Obamacare: Not repealed,  Republicans: panicking,  Aid efforts: slow,  Enemy:  NFL & Rocket man,  Golf club visits: 60,  So much Winning!

Ben.stephens@danielstewart.co.uk Head of DSFX