FOREX-Dollar awaits impeachment vote, kiwi flies on GDP

By Swati Pandey
SYDNEY, Dec 19 (Reuters) - The New Zealand dollar bounced
from a one-week low on Thursday after the country's third
quarter economic growth came in stronger than expected while
greenback traders awaited a vote to impeach U.S. President
Donald Trump.
In Britain, the pound remained under pressure on rekindled
fears of a chaotic exit from the European Union. It was last at
$1.3077 after sliding nearly 2% in as many days. The kiwi climbed to $0.6589 NZD=D3 from Wednesday's low of
$0.6555 after New Zealand's annual gross domestic product
accelerated 2.7% in the third quarter against expectations for a
2.4% gain. Risk sensitive currencies such as the kiwi and its
Australian counterpart started December on a firm footing led by
the apparent removal of two main risks dominating global
markets: a preliminary U.S.-China trade deal and the election
victory of U.K. Prime Minister.
However, fears have resurfaced this week. Despite the
Sino-U.S. trade agreement, the spectre of a U.S.-led tariff war
has not disappeared as traders await clarity on the deal.
The safe haven yen JPY= held in a tight range at 109.57
per dollar. It is mostly flat so far this month.
U.S. Trade Representative Robert Lighthizer said on Tuesday
that the United States may raise tariffs on European goods as it
tries to shrink its chronic trade deficit with the continent,
re-igniting worries of the prospects of the export-driven euro.
The euro EUR was last hovering around Wednesday's trough
of $1.1109 against the dollar, shrugging off a
better-than-expected survey of German business morale.
"The most significant piece of news overnight has been the
German December IFO survey, which... has shown evidence that the
German economy may be in the process of pulling itself up by its
boot straps," said Ray Attrill, Sydney-based head of forex
strategy at National Australia Bank.
"Improvement in the German – and broader Eurozone – economy
– is fundamental to our expectation for a softer U.S. dollar and
stronger Euro next year."
A major headwind for the dollar was a vote in the U.S. House
of Representatives on whether to impeach Trump later in the day.
The Senate is expected to vote in January.
Despite the political uncertainty, an index that tracks the
dollar against six major currencies jumped to a six-day high of
97.475 .DXY .
Solid U.S. economic data in recent days have tamed
expectations of any easing by the Federal Reserve in the near
term, keeping the dollar stronger. Money markets are not pricing
in a rate cut anytime soon. FEDWATCH
The Australian dollar AUD=D3 was a shade weaker at $0.6851
ahead of a monthly jobs report that could make or break
expectations for another interest rate cut as early as February.
RBAWATCH
Markets will focus on interest rate decisions from the Bank
of England and the Bank of Japan later in the day, with both
seen unlikely to change policy.