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: US Dollar to remain pressured until uncertainty fog dissipates Premium
The EUR/USD pair lost additional ground in the first week of February, settling at around 1.1820. The reversal lost momentum after the pair peaked at 1.2082 in January, its highest since mid-2021.
Gold: Volatility persists in commodity space Premium
After losing more than 8% to end the previous week, Gold (XAU/USD) remained under heavy selling pressure on Monday and dropped toward $4,400. Although XAU/USD staged a decisive rebound afterward, it failed to stabilize above $5,000.
GBP/USD: Pound Sterling tests key support ahead of a big week Premium
The Pound Sterling (GBP) changed course against the US Dollar (USD), with GBP/USD giving up nearly 200 pips in a dramatic correction.
Bitcoin: The worst may be behind us
Bitcoin (BTC) price recovers slightly, trading at $65,000 at the time of writing on Friday, after reaching a low of $60,000 during the early Asian trading session. The Crypto King remained under pressure so far this week, posting three consecutive weeks of losses exceeding 30%.
Three scenarios for Japanese Yen ahead of snap election Premium
The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.
Three scenarios for Japanese Yen ahead of snap election Premium
The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.