American FX Outlook: Unlocking the US government fails to promote US Dollar
|What you need to know before markets open:
- The US Dollar edged higher on Tuesday as investors took into account the end of 3-day period of the US government partial shutdown with the US President signing the protectionist act imposing tariffs on tariffs on solar panels and washing machines.
- The Bank of Japan left policy unchanged with key comment from Governor Haruhiko Kuroda that the central bank is not in a position to consider exiting its current policy.
- The World Economic Forum in the Swiss town of Davos continues with leaders expressing concerns about the sustainability of current economic and market bullishness.
Tuesday’s market moving events
- Richmond Fed manufacturing index is expected to decelerate to 19 in January.
- The consumer confidence in the EU is set to increase to 0.6% in January.
- Chicago Federal Reserve President Charles Evans gives introductory remarks before the Chicago Council on Global Affairs conference: "The Future of Monetary Policy: Embracing the Unconventional" in Chicago at 23:30 GMT.
Major market movers
- The US Dollar index edged higher with the chapter of the US government shutdown closed ahead of key European events including ECB meeting later this week.
- The Sterling appears to be the clear winner of the streak of the US Dollar softness rising as high as $1.4000 overnight before retreating lower.
- The US Dollar fell, rose and fall again against the Japanese yen on news of the Bank of Japan seeing no reason to review its policies.
Earlier in Asia/Europe
- The Bank of Japan left the policy rate unchanged at -0.1% for current account balances of financial institutions with the BoJ and the amount of monthly asset purchases unchanged at ¥80 trillion in 8-1 vote while saying the inflation outlook improved somewhat towards 2% inflation target.
- The UK public sector net borrowing shrank to £0.979 billion in December, down from revised £6.456 billion in the previous month.
- German investors sentiment measured by ZEW index increased 3.0 points in January 2018 to stand at 20.4 points.
- The financial market experts’ sentiment concerning the economic development of the Eurozone increased by 2.8 points, currently standing at a level of 31.8 points in January, ZEW also said.
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