Is Trump rally over?

5 January, 2017

The U.S. dollar is being sold across the board early Thursday as traders continued to digest yesterdays Fed minutes. Although most Fed officials believe that growth may surpass their previous forecast due to the expected expansionary fiscal policies, like many of us, they have no clear idea yet on what exactly is going to be implemented and to what extent it will impact economic growth, employment and inflation. However, it had become obvious now that the increase of expected interest rate hikes in 2017 from two to three was largely based on the unknown.

The dollar’s index price action suggests that Trump’s rally has almost come to an end after posting a new 14-year high of 103.82 on Tuesday, and now actions are required to see further gains. Until then, economic data are likely to take over the lead. Friday’s U.S. labor report is going to be a key, and although Nonfarm payrolls are expected to come at 175K, traders should focus on other components of the report, especially the average hourly earnings which dropped by 0.1% in November. Today’s non-manufacturing ISM and ADP reports will probably create some noise but tomorrow’s releases will confirm whether the dollar will find support or continue correcting to the downside.

U.S. stocks are still attempting to make new highs, with the Dow once again falling 44 points short of the key 20,000 psychological level. This is the third consecutive week were bulls fail to break above this level which could be a sign that bears might take over control on the short run, and if the dollar weakness today promotes a selloff in European equities this is likely to extend over to the U.S. session. 

Source link  
More bad news for Sterling as EURGBP

Backlash - that would be the word used to sum up the investor reaction from the latest attempt by UK Prime Minister Theresa May to push forward her...

EURJPY sinks to flash crash levels

A wave of risk aversion engulfed global equity and foreign exchange markets on Thursday after Donald Trump accused China of breaking...

US corporate earnings to drive global stock markets

Asian stocks, excluding Japan, are mixed on Monday, even after US stocks posted new record highs following the United States GDP report released at...

Mixed US corporate earnings reaction

Asian equities fluctuated mostly into the red on Friday, following the trend seen in their US counterparts on Thursday. As the latest US corporate earnings...

Brexit stalemate deepens

The drama, confusion and sheer uncertainty over Brexit intensified yesterday evening, after British MPs rejected all eight options aimed at...

Brexit chaos deepens

The British Pound fell yesterday afternoon, after the House of Commons Speaker John Bercow essentially banned Theresa May's Brexit deal from getting a third vote.

Rand gains on GDP but outlook clouded

Buying sentiment towards Rand has unexpectedly brightened today after official reports showed South Africa's economic growth cooled during...

US-China trade deal, ECB meeting and NFP

Asian equity markets entered the trading week on a front foot, following news that the United States and China were close to a breakthrough deal that...

Fed patience adds to the Dollar woes

Will the Federal Reserve raise interest rates at all in 2019? This was a question even Fed officials were unable to answer, as the minutes from the FOMC’s January policy meeting revealed.


Share it on:   or