Dollar Remains near 7-Week Lows vs. Other Majors

shutterstock_262120577

On Thursday, the greenback struggled near seven-week lows  compared to the other major currencies, as worries over U.S. President Donald Trump’s protectionist strategies, including an executive order to build a U.S.-Mexican border wall weakened dollar.

Trump on Voting Investigation

The greenback was generally weaker in spite of U.S. shares gaining and the Dow Jones Industrial Average  closing atop the 20,000 spot for the first time The dollar index, which tracks the dollar against a basket of major currencies, previously down 0.2% at 99.839. It plunged to 99.835 on Wednesday, its lowest level since Dec. 8.

The greenback destabilized after U.S. President Donald Trump stated on Twitter that he would seek a “major investigation” into assumed voter fraud, concentrating on two states and illegal voters.

The call came in spite of Republican elected representatives in key states saying they have found no evidence of deceitful voting.

The National Association of Secretaries of State said on Tuesday,  it had confidence in the “systemic integrity of our election process” and was not aware of any evidence related to Trump’s statements.

Since Trump’s inauguration last Friday, the greenback has been under pressure and worries about the lack of  transparency on his economic policies and doubts that his protectionist trade stance could hit corporate incomes and act as a strain on growth.

Against the Majors

EUR/USD inched up 0.10% to 1.0742, not far from Tuesday’s six-week high of 1.0775.

In Asia, 4th quarter inflation in New Zealand increased 1.3% year-on-year and 0.4% quarter-on-quarter, both beyond expectations with the NZD/USD down 0.12% to 0.7284 after the data, although Japan reported the corporate services price index increased 0.4% in December as projected.

In Japan, data on Wednesday indicated that exports increased for the first time in 15 months in December.  USD/CHF inched down 0.14% to trade at 0.9994.

On Wednesday, the Australian Bureau of Statistics reported that the consumer price index increased  0.5% in the 4th quarter of 2016, disappointing prospects for an increase of 0.7%.

President  Trump wants to renegotiate the North American Free Trade Agreement (NAFTA) with Canada and Mexico.

Temporarily, USD/CAD retreated 0.49% to trade at 1.3093, the lowest since January 18. After Trump tweets  “we will build the wall” the Mexican peso is increasing. It is up by 0.4% at 21.4400 per dollar as of 8:08 a.m. ET.

In pairs, USD/JPY increased 0.04% to 113.31, while GBP/USD gained  0.08% to 1.2644. AUD/USD traded at 0.7572, down 0.04%. The pound established support as investors expected the government’s bill to activate Article 50 and start the formal procedure of exiting the EU.

Keep updated on the stock market as MXTrade reviews market events, and provides you with the most recent and accurate information. Sign up a live account with MXTrade today and experience our professional brokers!

Advertisements

Dollar Drops Against Yen on Trade Data

 

shutterstock_262120577On Wednesday in Asia, the greenback inched weaker compared to the yen as Japan trade indicated a surprise increased on exports and investors noted the most latest  tweet by President Donald Trump indicated he would sign an executive order on Wednesday to build a wall on the border with Mexico.

USD/JPY moved hands at 113.59, down 0.18%, while GBP/USD increase 0.05% to 1.2528 after a court decision on Tuesday on the measures the government may take to exit from the European Union trade bloc.  USD/CHF increased 0.05% to 1.0013, and USD/CAD drop 0.18% to 1.3135.

In the meantime, the dollar stayed mildly supported on Wednesday morning, in spite of continuing worries over new U.S. President Donald Trump’s protectionist policies.

The U.S. dollar index, which gauges the greenback’s strong point against a trade-weighted basket of six major currencies, increased 0.11% at 100.37, after hitting a six-week low of 99.89 on Tuesday.

After Trump tweeted that he will take executive action to build a wall along the U.S.-Mexico border, USD/MXN changed.  Trump repetitively demanded Mexico would be forced to pay for the construction.

Prior to the  tweet, the U.S. greenback was fetching about 21.4850 pesos and after it was sent, it was gathering as much as 21.56 pesos.That’s still lower than the record high levels over 22 pesos touched earlier this month.

On Tuesday, the greenback staged a rebound in the U.S. with sentiment turning more positive on economic development outlooks that should be prompted by tax reductions and higher infrastructure spending under the new government.

While the Canadian inched  higher against its U.S. counterpart on Tuesday as worries eased that Canada could be hit by any changes to the NAFTA trade deal  and oil prices firmed.

USD/CAD hit lows of 1.3209 and previously  at 1.3224, down 0.11% from Monday’s close.

The pound declines to the day’s lows on Tuesday as a presiding that British Prime Minister Theresa May must pursue parliamentary approval before triggering the procedure to leave the European Union looked questionable to hamper the government’s ideas.

On Additional News

On January 25, the Australian and New Zealand dollars change lower against their U.S. counterpart, following weak inflation data from Australia and as demand for the dollar stayed widely supported.

AUD/USD dropped 0.66% to 0.7532, the lowest since January 20.

Earlier on  Wednesday, the Australian Bureau of Statistics reported that the consumer price index increases 0.5% in the 4th quarter of 2016, disappointing anticipations for an increase of 0.7 percent.

Year-on-year, consumer prices increased 1.5% in the last quarter, lower than the expected 1.6% increased.

NZD/ USD drops 0.29% to trade at 0.7228, off the prior session’s two-and-a-half month peak of 0.7279.

Keep updated on the stock market as MXTrade reviews market events, and provides you with the most recent and accurate information. Sign up a live account with MXTrade today and experience our professional brokers!

January 16 to 20 Forex Weekly Outlook

shutterstock_262120577

On Friday, the U.S. greenback declined against the other major currencies and the greenback index posted its biggest weekly drop since late October as optimism chilled over President-elect Donald Trump’s economic policy proposals

The U.S. dollar index, which gauges the greenback’s strong point against a trade-weighted basket of six major currencies, declined 0.29% to 101.17 on late Friday.

During the week, the index shed 1.0%, marking its poorest weekly performance since late October.

On earlier Friday, The index had increased after upbeat U.S. retail sales statistics boosted the economic outlook.

It was reported that in December,  the Commerce Department reported retail sales increased 0.6%, while November’s sales were revised up to indicate a 0.2% increase.

However,  the greenback retraced gains during doubts over the incoming Trump administration’s plans for fiscal stimulus, deregulation and tax reductions.

On Wednesday, the greenback decline suddenly  and reach five week low against the euro, yen and Swiss franc on Thursday as Trump frustrated traders who had been expecting he would address economic and fiscal policies in his first formal news conference as U.S. president-elect.

Earlier this month, the dollar index rallied to 14-year high on expectations that Trump’s policies would speed up growth and inflation and prompt the Fed Reserve to increase  interest rates more rapidly.

On January 20, 2017, Trump will officially take office.

On late Friday, USD/JPY declined  0.14% in 114.53 and the pair dropped 2.23% for the week, its poorest week since late July.

The euro also pressed higher, with EUR/USD at 1.0644 in late trade, after touching an intra-day low of 1.0596 following the U.S. retail sales report. For the week, the euro increased 1.08% compared to the greenback.

Sterling inched higher; with GBP/USD  easing up 0.12% to 1.2174 but stayed under pressure before a speech on the U.K.’s Brexit plans that Prime Minister Theresa May will make on Tuesday.

In the week onward, financial markets will continue to concentrate on U.S. President-elect Trump ahead of his inauguration on January 20, Friday.

Investors will be looking forward to Tuesday’s strongly expected Brexit speech and Thursday’ policy statement by the European Central bank.

China’s data on 4th quarter growth will also be closely observed.

On Additional News

On January 16, Martin Luther King Day,  U.S. financial markets will be closed.  Bank of England Governor Mark Carney is scheduled  to speak at an event in London.

On Tuesday, January 17, New Zealand is to announce private sector statistic on business confidence.

New York Fed Reserve President William Dudley is to talk at an event in New York and the U.S. is also to announce the Empire State manufacturing index.

The U.K. is to publish data on inflation. U.K. Prime Minister Theresa May is scheduled to speak regarding starting proceedings for Britain’s exit from the EU.

The ZEW Institute is to report on German economic sentiment.

On  January 18, the U.K. is to post its monthly jobs report.

The euro zone is to publish revised data on inflation.

The U.S. is to release figures on inflation and industrial production. Later in the day, Fed Chair Janet Yellen is to speak at an occasion in San Francisco.

The Bank of Canada is to release  its current monetary policy decision and hold a press conference to talk about the economic outlook.

Thursday, January 19, Australia is to release  its monthly employment report.

The European Central Bank (ECB) is to publish its current monetary policy decision. The announcement is to be followed by a press conference with President Mario Draghi.

Canada is to report on manufacturing, sales and foreign securities purchases.

Fed Reserve Chair Janet Yellen is to speak at an event at Stanford.

Friday, January 20, China is to publish statistics on 4th quarter progress along with figures on industrial production.

The U.K. is to publish statistic on retail sales. Canada is to round up the week with statistic on retail sales.

Keep updated on the stock market as MXTrade reviews market events, and provides you with the most recent and accurate information. Sign up a live account with MXTrade today and experience our professional brokers!

Dollar Inch Up, Markets Await Trump News Conference

shutterstock_262120577

On Wednesday, the greenback inched higher  against a basket of major currencies in advance of a news conference by U.S. President-elect Donald Trump in which he is anticipated to spell out more regarding his plans for the economy.

The  dollar index increase 0.2% to 102.18 (DXY).

The greenback rally generated by Trump’s surprise victory in the November election has shown indications of fading, as the index has gone from a 14-year high of 103.82 scaled on Jan. 3 to a low of 101.30 over the previous  week.

The euro declined 0.1% at $1.0545 after brushing a 10-day peak of $1.0628 overnight.

The greenback firmed 0.3% to 116.100 yen. It had suffered two days of losses against the safe-haven Japanese currency.

“Currency pairs, settled into a narrow range ahead of Trump’s news conference – his first since the election – which is due to start at around 11:00 EST (1600 GMT) neared, according to the report.

“I did not expect the Tokyo session to be this quiet,” said Masashi Murata, senior currency strategist at Brown Brothers Harriman in Tokyo. “It reflects the level of caution prevailing in the market before Trump’s appearance.”

“During the past two months,anticipations that the Trump administration would enact economic stimulus gauges backed by massive fiscal spending have taken Wall Street to record highs, U.S. debt yields to levels unseen since 2014 and the dollar index to the 14-year high, according to the reports.

“Against that backdrop, financial markets are keen to see how Trump will follow through on campaign pledges.”

“The dollar is set to resume the Trump rally if he provides specifics of stimulus measures, notably those related to tax cuts, which appear achievable,” stated by an strategist.

“On the other hand, the market also focuses on potential risk factors, like Trump taking a tough stance against China. That could prompt the dollar to fall against the yen.”

Somewhere else in the markets, sterling plunged 0.1% to $1.2168 to inch back towards a two-month low of $1.2107 set overnight. This week, uncertainties about the terms of Britain’s exit from the European Union have kept the currency under heavy pressure.

After popping up to $0.7385 overnight, the Australian dollar was flat at $0.7372, its highest since mid-December. This week, the U.S. dollar stall and increase in iron ore and coal prices have strengthened the  Aussie this week.

After touching a four-week peak of $0.7048 on Tuesday, the New Zealand dollar held steady at $0.6987.

Keep updated on the stock market as MXTrade reviews market events, and provides you with the most recent and accurate information. Sign up a live account with MXTrade today and experience our professional brokers!

Dollar Dips, Sterling Slides Again

 

cropped-cropped-shutterstock_450140326.jpgOn Monday, the greenback inched lower against a basket of the other major currencies, while sterling was suddenly lower as fears over prospects for a ‘hard Brexit’ weighed.

The U.S. dollar index, which gauges the greenback’s strong point against a trade-weighted basket of six major currencies, eased to 102.08.

After Friday’s U.S. nonfarm payrolls report for December, demand for the dollar continued to be underpinned which indicated a slowdown in hiring, but the fastest wage progress in more than seven years, supported the case for rate hikes this year.

The Fed Reserve increased interest rates in December and indicated that it anticipates to hike rates three more times in 2017.

Higher rates increase the greenback  by making the currency more attractive to yield-seeking investors.

On Monday, Boston Fed President Eric Rosengren called for the U.S. central bank to step up the pace of interest rate increases, notice that inflation could overshoot its target if it does not.

The greenback was lower compared to the yen, with USD/JPY is sliding 0.45% to 116.48, down from an intra-day high of 117.53.

The euro pushed higher, with EUR/USD increases 0.2% to 1.0554.

The pound was suddenly lower compared to the greenback and the euro, with GBP/USD hitting lows of 1.2125, the lowest level since October 28, before pulling back to 1.2144.

EUR/GBP hit peaks of 0.8690, the strongest level since November 15 and was previously at 0.8688, up 1.33% for the day.

The selloff in sterling came after British Prime Minister Teresa May stated on  Sunday that the country would not be keeping “bits” of European Union membership.

The statements were seen as a sign that the UK won’t try to negotiate continued full access to the European single market when it exit the European Union.

Sterling unsuccessful to find support after May stated on Monday it was wrong to say a “hard Brexit” was inevitable.

Somewhere else, “the Turkish lira fell to a fresh record low against the dollar on Monday after ratings agency Moody’s said that bank profits will be hit by an increase in bad loans this year and warned of a “general worsening” in the investment climate in the country.,” according to the report.

After starting the day at 3.6433, USD/TRY  jumped 2.48% to trade at 3.7342.

On Additional News

On Tuesday, the greenback slipped as the yuan steadied on a jump in Chinese factory gate prices.

The dollar index declined 0.16% to 101.76 at 02:15 ET. It was flat at the 6.88 yuan mark.
China’s PPI was up 5.5% in the December vs. forecast rise of 4.5%.

That was the fastest pace of development in Chinese factory gate prices in five years as commodity price increases.

This year, the Chinese statistic could increase expectations of global reflation. The greenback  fell back to the 115 level against the yen.

Keep updated on the stock market as MXTrade reviews market events, and provides you with the most recent and accurate information. Sign up a live account with MXTrade today and experience our professional brokers!