U.S. Dollar Declining after Trump and Detailed Brexit Strategy

USD

The U.S Dollar sank further into the long weekend as President-elect Donald Trump stated that, he believes, the greenback is “already too strong.” The sudden swift analysis of foreign exchange markets only helped put downward pressure on the “buck” after a much a maligned week that saw the currency swing all over the place with no definite direction. All across the board the dollar’s hurt, with the Bloomberg Dollar Spot Index at its weakest level in a month.

Data last week kept the dollar from likely losing further, as the economy showed steadiness in labor and long-term investment by producers. Speeches from Federal Reserve members are slated for today that could have some influence. We will monitor other headlines, but it is clear that all eyes are on the U.S. as a new administration walks into a good situation, but with plenty of arsenal to undo or boost progress seen since the 2008 crisis.

 

GBP

Sterling is on the rise after initially negative reaction to Prime Minister Theresa May’s press conference in which she laid out plans for the official Brexit. Speaking in a friendly a tone as possible considering the circumstances and the affirmation of a tough divorce, the PM explained that she wants Britain fully out not “half in.” Economically, inflationary figures impressed, aiding then “quid’s” comeback.

There will indeed be a new course of action when it comes to trading agreements since the UK has failed to convince European lawmakers to leave the UK with benefits of the single market after the referendum. Markets seem to believe that at least setting out a plan and following it is a good sign, as participants just want to see if Parliament denounces invoking Article 50 or push ahead with it.

 

EUR

Euro climbed overnight with news of Trump’s dovish Dollar comments and improved sales in the auto-making industry. Currently, the shared currency is on a long winning streak, having appreciated by 3.2% since January 3rd. These are now the worst levels for the greenback against Euro since December 7th.

The European Central Bank will meet on Wednesday when they are likely to announce no changes to current policy, one with 0.0% as the benchmark rate and negative deposit rates. The central bank has vowed to keep stimulus going until the end of 2017. Euro may be strengthening now after a big end-of-year slump, but elections and other political factors could easily turn the beat around.