The US Presidents strikes again in the Forex market. After reports came out from the President’s administration that Donald Trump probes Currency Manipulator penalty methods, USD dropped. Yet, will the bulls take charge again soon?
30 March, XTB – Donald Trump has once more caused a stir in the markets with recent reports of comments that the US president is looking at ways to punish currency manipulators. Immediately there’s been a drop in the US dollar with the USDJPY pair one of the most obvious places to see it.
Trump’s currency manipulator probe and GPD print pressured USD
The market has quickly sunk around 50 pips on the news after threatening to break higher following the better than expected GDP print:
– US final Q4 GDP Q/Q: 2.1%
– Consensus: 2.0%
– Previous reading: 1.9%
On longer timeframes the market was close to testing a potentially key line in the sand at 111.60 before the news broke. This area had previosuly acted as support on several occasions and could now be viewed as a resistance zone that bulls will want to push price above before they can think about the market resuming its uptrend.
Don’t overlook Fed Lorreta Mester’s hawkish remarks
Just minutes after Donald Trump currency manipulator comments, Fed member Lorreta Mester has been on the wires. She shared some interesting remarks on the economy and monetary policy:
- Further hikes will be needed
- Sees growth somewhat above 2.0% over the next year
- Supports further hikes but not at each meeting
- Economic expansion is sound
- Weak Q1 is transitory
- Unemployment will remain below 5.0 for two years
- Sees a sustained return to 2% inflation target over the next year or so
Especially her reference to a weak Q1 is interesting. Whilst there has been some softer than expected PMI data in recent months, overall the data mix has been pretty solid from the US.
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