Trump Supports a Strong Dollar

26 January, 2018

Markets have had a volatile session this week thanks to various US officials and yesterday was no exception, with President Trump speaking in Davos. He made comments about the TPP, saying he would do a deal if it was ‘substantially’ better. On NAFTA he said he may terminate or may not and that they were still trying to renegotiate it. On Brexit Trump and May want a US-UK trade deal as soon as possible. Perhaps his most important comments were on the US dollar when he said he wanted to see a strong dollar. He said that Treasury Secretary Mnuchin’s comments were taken out of context. Mnuchin said that a softer dollar would benefit exports in the short term, but that in the long-term, the dollar would strengthen. “The dollar is going to get stronger and stronger, and ultimately I want to see a strong dollar,” Trump said. This had an impact on the Dollar with EURUSD falling back from the 1.25000 area to 1.23636 and USDJPYrising from 108.545 to 109.695.

German IFO – Current Assessment (Jan) was 127.7 v an expected 125.4, from 125.4 previously, which was revised up to 125.5. IFO – Business Climate (Jan) was 117.6 v an expected 117.1, from 117.2 previously. IFO – Expectations (Jan) was 108.4 v an expected 109.4, from 109.5 prior, revised to 109.4. EURUSD moved higher from 1.23962 to 1.24331 after the data.


The ECB Interest Rate Decision was as expected, left unchanged at 0%. The ECB Deposit Rate Decision, also released at this time, was left unchanged at -0.4%. During the ECB Press Conference at 13:30 GMT, ECB President Draghi was asked questions on monetary policy, saying that there were additional concerns over unwanted tightening of US FED policy as well as international relations. On the Euro, he said that markets should ask whether FX movement comes from a stronger economy, statements or monetary policy elsewhere. EUR has strengthened also on comments by ‘someone else’. On rate hikes, he said that ‘based on today’s data little chance at all that ECB interest rates will be raised this year’. For the Governing Council, the impact on inflation is always the main concern and the commitment to the inflation target remains firmer than ever. ‘We can’t yet declare victory’. He also said that there hasn’t been much of a change since October and therefore the statement was unchanged. He was firm that monetary policy would remain accommodative well past QE ending, as per ECB statements. The EURUSD rallied from 1.24000 to a high of 1.25372 on the back of Draghi’s comments.

Canadian Retail Sales Ex-Autos (MoM) (Nov) was 1.6% v an expected 0.8%, from 0.8% previously. Retail Sales (MoM) (Nov) was 0.2% v an expected 0.7%, from 1.5% previously, which was revised up to 1.6%. USDCAD sold off to 1.22811 after this release.

US New Home Sales (MoM) (Nov) was 0.625M v an expected 0.679M, from 0.733M previously, revised down to 0.689M. New Home Sales Change (MoM) (Nov) was -9.3% v an expected -7.9%, from 17.5% previously, which was revised down to 15.0%.

Source link  
Cautious mood has returned to stocks

American markets ended trading on Wednesday with a slight increase. Asian bourses also experienced growth at the opening, but it was quickly...

Emerging markets rebound seems over

Asian markets have turned to a decline with a renewed force. After the rebound of last week, the index MSCI Asia ex Japan loses 1.2% and is only...

Rebound in Asian markets intensifies

On Friday morning, the demand for risks on the Asian bourses continues to recover. MSCI for Asia ex Japan is adding more than 1.2% this morning, having...

Reasons to rebound EM indices

Asian markets are adding after reaching 14-month lows the day before. Positive markets are supported by the reports about China's invitation to trade...

Strong data supports U.S. markets

Stocks of the Emerging Markets remain under pressure on Wednesday morning, with positive sentiments prevailing in American markets following...

Pound press dollar on news about Brexit

Michael Barnier, the EU's top negotiator on Brexit, called a reaching of the agreement on the deal within next 6-8 weeks realistic. This news supported...

Brent reversed from resistance level

Brent Crude Oil recently reversed down sharply from the major, multi-month resistance level 79.50 (which has reversed the price multiple times from the...

EM Markets sale-off spreading to DM

The current weakness on the developing countries financial markets is the longest since 2008. The similarities go further than that: as well as 10 years ago...

The price for trade uncertainty

The markets are cautiously on buy for American stocks, and the dollar adds on fears that trade conflicts are seriously stifling the business sentiment...

In the past 24 hours Bitcoin has gained 1.78% and reached $6527.87921124. Open your trading account with the best cryptocurrency brokers on special terms today.

In the past 7 days the EUR/USD pair has lost -0.0963% and is now at $1.1682. Start trading and making money on Forex today.

In the past 7 days Ethereum has gained 4.37% and is now at $223.55923807. 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
6FIBO GroupFIBO Group84%