A Weaker Dollar is Good for the US

25 January, 2018

Yesterday, Senior US Officials took the lead from their President and made clear the US position on Trade. Commerce Secretary Wilbur Ross took aim at China, saying the Chinese 2025 technology plan is a ‘direct threat’ to US technological dominance. The Chinese plan aims to support and develop sectors of their economy such as artificial intelligence, electric cars and electronics. Of concern to the US is IP theft and encroachment. Earlier, he said that the reaction from the US is because of inappropriate behaviour of trading partners. Adhering to global trade rules isn’t protectionist and the US is often accused of protectionism. There will be a very busy trade agenda in terms of those actions by the US. He also said trade wars are fought ‘every single day’ and it was up to the Chinese to decide if they want to retaliate. If there is a reaction from China then the US would weigh its options. But there will be more tariff measures to come.

US Treasury Secretary Steve Mnuchin said that ‘a weaker dollar is good for the US’ and that it was good for trade. He also said the vote from the market on tax reform is very positive, and that he is not particularly concerned about China’s US treasury buying, and that it’s not an issue in talks with China. Tax reform brings back trillions of Dollars to the US. The US Dollar index has been driven to a three-month low and is weaker against other currencies.

In reaction, China’s Ministry of Commerce attempted to cool the situation by saying they hope to handle frictions with the US in the proper manner. China is to take appropriate measures against unilateral moves. They are always open to dialogue and cooperation with the US. China doesn’t want an escalation of trade spats with the US. The outlook for trade frictions in 2018 is still severe.

German Markit Manufacturing PMI (Jan) was released at 61.2 v an expected 63.0, from 63.3 previously. Markit Services PMI (Jan) was 57.0 v an expected 55.6, from 55.8 previously. Markit PMI Composite (Jan) was 58.8 v an expected 58.6, from 58.9 prior. EURUSD rallied from 1.23120 following this data release.

Eurozone Markit Manufacturing PMI (Jan) was 59.6 v an expected 60.3, from 60.6 previously. Markit Services PMI (Jan) was 57.6 v an expected 56.4, from 56.6 previously. Markit PMI Composite (Jan) was 58.6 v an expected 57.9, from 58.1 prior. EURUSD moved higher to 1.23557 from 1.23397.

UK Average Earnings Excluding Bonus (3Mo/Yr) (Nov) was 2.4% v an expected 2.3%, from 2.3% previously. Claimant Count Change (Dec) was 8.6K against an expected 5.4K, from a previous reading of 5.9K, which was revised up to 12.2K. ILO Unemployment Rate (3M) (Nov) came in as expected, unchanged at 4.3%. Average Earnings Including Bonus (3Mo/Yr) (Nov) was also as expected, unchanged at 2.5%. Claimant Count Rate (Dec) was 2.4% from 2.3% previously. GBPUSD moved higher into resistance at 1.41182 following this data release.

US Housing Price Index (MoM) (Nov) was 0.4% against an expected 0.3%, from a reading of 0.5% previously, which was revised up to 0.6%.

US Markit Manufacturing PMI (Jan) was 55.5 v an expected 55.0, from 55.1 previously. Markit Services PMI (Jan) was 53.3 against an expected 54.0, from 53.7 previously. Markit PMI Composite (Jan) was 53.8 against an expected 53.5, from 54.1 prior. USD crosses may be heavily traded as a result of this data.

US EIA Crude Oil Stocks Change (Jan 19) came in with a smaller draw than expected of -1.071M. The previous reading from last week was -6.861M. The expected reading this time is in the region of -1.600M. WTI rose to $65.40 from $64.53.


Source link  
Markets are taking a breath right now

Whether this turns into a broader rally or the selloff is resumed remains to be seen. Stock markets are higher after support was found in the European...

Trump wants a further $200 Billion of tariffs

While there was risk yesterday from Central Bankers very little was said to move the market. Instead the Trade War narrative boiled up again with the latest...

Oil down over 4% from Friday's open

OPEC and non- OPEC members are meeting in Vienna on Thursday for the start of a 3 day summit where production cuts are on the agenda...


ECB sparks huge moves in the Euro

The ECB dominated markets yesterday as they shifted their policy stance and signalled their exit from QE. The Bank is looking to reduce its bond buying by...

FOMC meeting results in a weaker dollar

The FOMC raised rates by 0.25 bps yesterday evening to a 1.75% to 2.00% target range in a hawkish move and reaffirmed its expected forecast of 2 more...

Progress made between Trump & Kim

US President Trump and North Korean Leader Kin Jong Un met in Singapore overnight. Progress was made between the two leaders during this first meeting...


Poor British statistics presses on sterling

Britain's statistics continue to indicate a slowdown in the UK economy. Today's data showed a decline in industrial production by 0.8% during April against...

Markets pause in anticipation

Yesterday's trading session saw a rotation from the NASDAQ and Tech into the Dow Jones and Industrials. The European Indices have under preformed this week...

RBA leaves rates at on hold 1.50%

Yesterday's session was quite after a pickup in volatility last week and there has been little in the way of movement overnight. This is despite some negative...


In the past 24 hours Bitcoin has gained 0.69% and reached $6788.81. Open your trading account with the best cryptocurrency brokers on special terms today.

In the past 7 days the EUR/USD pair has lost -1.7729% and is now at $1.1587. Start trading and making money on Forex today.

In the past 7 days Ethereum has gained 13.44% and is now at $537.328. 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
1easyMarketseasyMarkets88%
2FXTMFXTM87%
3HYCMHYCM85%
4FIBO GroupFIBO Group80%
5FxProFxPro77%
6FXCMFXCM74%
7Alfa-ForexAlfa-Forex72%
8HotForexHotForex71%
9FP MarketsFP Markets70%
10XMXM69%
  


Share: