Summary
The Dollar Index has soared 4.1 percent since the Friday before the American election. The euro is plausibly headed to parity. Shinzo Abe and Japan’s exporters have been given the gift of a weaker yen. The sterling is flirting with historic lows and commodity currencies are freighted with lower resource prices and potential trade disputes.
Is the surging U.S. currency due solely to the unexpected presidential victory of Donald Trump? Many of the current market trends predate the election of the New York billionaire to the White House but all seem to have been augmented since November 8th. Are Mr. Trump’s economic, financial and legislative policies likely to be as beneficial to the dollar as the markets assume?
What Congressional difficulties stand in the way of the new administration’s spending and regulatory plans come January 20th. Markets are in the first blush of a their reaction to the new unified Republican regime in Washington but as always the devil is in the details.
With the assurance that little in life works out exactly as planned join us as we examine some of the political and economic pitfalls that lie ahead for President-elect Trump and his administration.
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EUR/USD stays in positive territory near 1.0650
EUR/USD clings to modest daily gains at around 1.0650 in the American session on Wednesday. The US Dollar struggles to gather strength amid a modest improvement seen in risk mood and helps the pair hold its ground.
GBP/USD stabilizes at around 1.2450 after UK inflation data
GBP/USD consolidates its daily gains near 1.2450 after recovering toward 1.2500 with the immediate reaction to stronger-than-expected inflation data from the UK. The renewed US Dollar weakness also helps the pair hold its ground.
Gold eases despite risk-off mood
Gold trades in a relatively tight range near $2,390 in the second half of the day on Wednesday. In the absence of high-tier data releases, investors keep a close eye on headlines surrounding the Iran-Israel conflict.
XRP tests $0.50 resistance after Ripple CLO clarifies that no pretrial conference took place with SEC
XRP is stuck below $0.50 resistance after failing to close above this level since Monday. Ripple CLO Stuart Alderoty said late Tuesday there was no pretrial conference since the SEC dropped charges against executives.
World economy: To cut or not to cut (simultaneously)?
US inflation March figure, again higher than expected, put an end to the scenario of a simultaneous first rate cut by the Fed, the ECB, and the BoE in June.