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EURUSD breaks above resistance - PM Bulletin
31 Jan 2017
Equities recover after Monday’s sell-off - AM Briefing
31 Jan 2017
Trending markets and Andrews’ Pitchfork -Trading Guide
30 Jan 2017
Investors rattled by Trump’s curbs - AM Briefing
30 Jan 2017
Dow holds above 20,000 as dollar firms - AM Briefing
27 Jan 2017
Dow breaks above 20,000 - Video Update
26 Jan 2017
Dow at 20,000 boosts risk appetite - AM Briefing
26 Jan 2017
Dow finally breaks 20,000 - PM Bulletin
25 Jan 2017
Wall Street leads stocks higher - AM Briefing
25 Jan 2017
Consolidation continues - Video Update
24 Jan 2017
Dollar recovery helps lift sentiment - AM Briefing
24 Jan 2017
Money management and stop-losses -Trading Guide
23 Jan 2017
Stocks fall on US protectionism fears - AM Briefing
23 Jan 2017
Trump inauguration in focus - AM Briefing
20 Jan 2017
A look-ahead to Trump’s inauguration - Video Update
19 Jan 2017
ECB President Draghi’s press conference in focus - AM Briefing
19 Jan 2017
Dollar steadies after sell-off - Video Update
18 Jan 2017
Equities drift in featureless trade - AM Briefing
18 Jan 2017
Dollar pull-back lifts precious metals- PM Bulletin
17 Jan 2017
Dollar slumps in early trade - AM Briefing
17 Jan 2017
Charting analysis for beginners - Trading Guide
16 Jan 2017
Sterling slumps on “Hard Brexit” concerns - AM Briefing
16 Jan 2017
Earnings in focus - AM Briefing
13 Jan 2017
Fourth quarter earnings in focus - Video Update
12 Jan 2017
Market Info Update: Martin Luther King Day Monday 16th January 2017
12 Jan 2017
Dollar lower as Trump skips stimulus talk - AM Briefing
12 Jan 2017
Trump news conference - Video Update
11 Jan 2017
Trump press conference in focus - AM Briefing
11 Jan 2017
Has gold turned a corner? - PM Bulletin
10 Jan 2017
Another mixed start for Europe - AM Briefing
10 Jan 2017
Trading Psychology - Trading Guides
09 Jan 2017
Sterling slips on "Hard Brexit" fears - AM Briefing
09 Jan 2017
Non-Farm Payrolls in focus - AM Briefing
06 Jan 2017
Non-Farm Payroll look-ahead - Video Update
05 Jan 2017
FOMC minutes viewed as hawkish - AM Briefing
05 Jan 2017
Look-ahead to release of FOMC minutes - Video Update
04 Jan 2017
FOMC minutes in focus - AM Briefing
04 Jan 2017
Strong start to 2017 - PM Bulletin
03 Jan 2017
Equities push higher in first session of 2017 - AM Briefing
03 Jan 2017
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Earlier today the EURUSD broke above a key level of resistance around the 1.0750 area. The pair went on to record its best intra-day high since 8th December. That spike higher was a knee-jerk reaction to the headlines which followed the European Central Bank’s (ECB) December monetary policy meeting. But the euro subsequently slumped as traders and investors looked beneath the headlines. There had been a worry that the central bank would taper its asset purchase programme, and that’s exactly what it did, reducing its bond buying to €60 billion per month from €80 billion. However, the ECB also said that it would extend its bond buying from March to December 2017 (slightly longer than the September 2017 end date expected). Overall, this meant a modest increase in monetary stimulus and the euro pulled back sharply. It came under further pressure as the US Federal Reserve hiked rates at its own December meeting and forecast more tightening to come. This came on the back of increased inflation expectations due to President Trump’s election promises of tax cuts, infrastructure spending and regulatory roll-back.

But the US dollar has fallen back sharply since the New Year. Mainly as there’s a growing feeling that the new president will struggle to deliver on his election promises as he has to win over a recalcitrant Congress. These fears have intensified this week following the angry reaction to President Trump’s immigration restrictions and travel bans. Despite Trump delivering on promises to reduce regulations on businesses  (see last week’s executive orders to expedite the Keystone XL and Dakota Access pipelines) there are concerns over his leadership style. This seems odd in some respects as it was pretty obvious what US electors were voting for. But no doubt many hoped that he would behave differently once he won the presidency.

This month’s sell-off in the dollar (and rally in the EURUSD) should please the Trump administration which has said on a number of occasions that they don’t want a strong dollar. The dollar fell further today after the head of Trump’s National Trade Council said that Germany was using a “grossly undervalued” euro to exploit the US and her EU partners. Tomorrow we have the first FOMC meeting of 2017. This is unlikely to be market-moving as it follows straight after the Fed’s December meeting when it hiked rates for only the second time in ten years. But what happens now to the dollar is of vital importance to all financial markets. And if it pulls back further from here then it will help take the pressure off China and its weakening yuan. 

Disclaimer:

Spread Co is an execution only service provider. The material on this page is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by Spread Co Ltd or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

 

Posted by David Morrison

Tagged: Bulletin PM

Category: PM Bulletin


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