President Trump sent the dollar rallying late yesterday, after stating ahead of his main speech today that his administration seeks ‘historic’ U.S. military spending boost, domestic cuts. This and more on today’s daily Forex news and trade opportunities.
February 28, AtoZForex – On the economic calendar, the US prelim GDP q/q and the CB Consumer Confidence are the major data to watch out for the list of daily Forex news.
#1 The Bond Market Is Calling Yellen’s March Rate Hike Bluff
Markets are generally expecting a March rate hike. Thanks to an effort from Feb members ranging from Janet Yellen to Fed newcomer Patrick Harker who have been trying to incite investors into believing an interest-rate increase in March is on the table. As reflected in the bond market, traders seem unconvinced there’s much behind the tough talk of Yellen and her cohorts. With less than three weeks to go, traders see slightly more than a one-in-three chance the central bank raises rates. As stated by Bloomberg, this is well short of the 50 percent minimum that has predicated every rate hike in the past quarter-century, according to data compiled by Bianco Research.
#2 China to strengthen FX regulations?
In addition to the many steps taken by Chinese authorities in recent months to curb capital flight from the country to support the weakening yuan currency, while trying to attract more foreign investment, China’s FX regulator said on Monday that it will strengthen supervision of the foreign exchange market in 2017. Also adding that it will improve policy transparency while promoting the further opening of financial markets.
#3 Why the greenback fell after Steven Mnuchin’s tax reform remarks?
The US Treasury Secretary, Steven Mnuchin did not appear to take any side in relation to Donald Trump’s border adjustment tax initiative. However, some of the market observers thought he did. Market observers also highlight that Mr. Mnuchin did not sound protectionist on the topic of US trade. Firms have been anxiously awaiting the border adjustment tax. The policy has been proposed as a part of the White House agenda. Moreover, markets expect that the tax reform will spur the dollar rally, in case it passes. The tax would apply to all goods coming into the US, except for exports.
#4 Pound suffers on Scotland vote news
As Reuters reported on February 10, according to a senior British minister, Britain saw no need for a second Scottish independence referendum. Also, the devolved Scottish government should focus on improving the economy. While tackling domestic issues rather than “flirting with secession.” However, an opinion poll published early February showed an increase in support for Scottish independence. As PM Theresa May proposed making a clean break with the European Union. Stoking speculation that Scotland could demand another secession vote. The Times of London reported late on Sunday that it now seems that the SNP has gotten its wishes. Despite her stern denials, Theresa May’s team is preparing for Scotland to potentially call independence referendum in March. In order to coincide with triggering of Article 50, citing unidentified senior government source.
#5 Trump seeks ‘historic’ U.S. military spending boost, domestic cuts
Despite being the strongest military power in the world. President Donald Trump has said he seeks a “historic” increase in defense spending. The proposed rise in the Pentagon budget to $603 billion follows the country’s winding down of major wars in Iraq and Afghanistan. The plan has, however, met resistance as Democratic lawmakers. Who said cuts being proposed to pay for the additional military spending would cripple important domestic programs. Such as environmental protection and education.
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