President-elect leaves dollar bulls unimpressed

12 January, 2017

The long-awaited first press conference by President-elect Donald Trump left many investors with more questions than answers as he failed to justify the current premium priced in the dollar and equity markets.

We already knew that Trump wants to build a border wall with Mexico, bring back U.S. production onshore, and that he’s willing to be the best job creator America ever knew, but what’s his plans on corporate tax reforms? How and when is he planning to spend on roads, bridges, and other infrastructure projects? Is he going to impose tariffs on imported goods from China, Mexico and the rest of the world? Unfortunately, no updates were revealed.

Thus, the greenback was dragged, falling against all major currencies on Wednesday with the dollar index falling to lowest levels since Dec 14 at 101.28. The selloff continued until early Thursday suggesting that dollar bulls are no more willing to price any additional premium until we get more clarity on his promised fiscal plans.

The continued fall in U.S. treasury yields is another factor dragging the dollar. U.S. 10 year yields have been in a down trend since Dec 14, losing 11.8% in value after spiking 42% since the election results were revealed.

U.S. stocks were less impacted, and managed to close higher despite the volatility and sharp selloff in pharma stocks which were attacked by Trump. Whether the rally can be sustained will depend on two factors, earning growth and actions from Trump’s administration as his words and tweets are clearly starting to show less influence.

The combination of dollar weakness, lower U.S. yields and doubts in Trump's policies offered gold a boost, with the yellow metal posting a high of 1,199. So far gold has recovered 6.8% from December lows, and trader higher in 11 out of 13 days. Fed Chair Janet Yellen’s speech will probably decide whether we’re going to see a break and hold above 1,200 today. 


Source link  
Pound crumbles as UK inflation fails to rise

Repeated signs of easing inflationary pressures in the United Kingdom could plant a seed of doubt among investors about whether the Bank...

Global shares come under pressure

Asian equities fell on Tuesday after Oil prices tumbled by more than 4.6% during the previous session, following reports that Saudi Arabia has offered...

USD and Nasdaq continue strong run

US inflation figures were the main focus today for the US economy, as it saw CPI lift in line with expectations to 0.2% m/m. Well this is not a strong hawkish signal...


Trade war escalation triggers risk aversion

A fresh wave of risk aversion swept across financial markets after the United States threatened to impose tariffs on an extra $200 billion worth of Chinese goods...

Investors shrug off trade fears

Trade frictions dominated the headlines last week, but Wall Street investors shrugged off worries of an escalating trade war and instead cheered...

US tariffs on China to steer attention away

Confirmation in the early hours of Friday morning that President Trump will impose tariffs on Chinese imports starting today is likely to take attention away...


OPEC looks to increase supply

Oil markets have been focused on the OPEC meeting happening at present which is likely to wrap up tomorrow and give some serious insight into OPEC...

Market event not to ignore

In a week where market headlines continue to be driven by a potential trade war breaking out between the United States and China along with the latest OPEC meeting...

Markets searching for new catalyst

U.S. equities kicked off the trading week with two indices, the Nasdaq Composite and the Russell 2000, hitting new record highs. This impressive performance...


In the past 24 hours Bitcoin has gained 0.61% and reached $7371.88. Open your trading account with the best cryptocurrency brokers on special terms today.

In the past 7 days the EUR/USD pair has lost -0.1166% and is now at $1.1665. Start trading and making money on Forex today.

In the past 7 days Ethereum has gained 8.65% and is now at $480.033. Have the most popular cryptocurrencies compared online 24/7.


Top Brokers offering Daily Forex Market Reviews


Forex Currencies Forecasts


Top 10 Forex Brokers 2018

# Broker Review
1easyMarketseasyMarkets90%
2FXTMFXTM88%
3HYCMHYCM86%
4FIBO GroupFIBO Group79%
5FxProFxPro78%
6FXCMFXCM73%
7AvaTradeAvaTrade69%
8HotForexHotForex68%
9XMXM68%
10Alfa-ForexAlfa-Forex66%
  


Share: