Trump's First Days in Office Knock Down the "Buck"

USD

The U.S. Dollar is trading in weaker ranges following a tough initial weekend for President Donald J. Trump after his inauguration. Indeed, the President elicited the protectionism and isolationism that characterized many of his campaign speeches, promising to unify the country in the name of patriotism with the chant of “America First.”

It is still very unclear what the course of action will look like since very little has been given in regards to economic policy details, just the idea that the country needs infrastructure and likely something well be done about it. Investors worldwide seem to be taking it all with caution and the dollar’s momentum seems to be fading.

The Bloomberg Dollar Spot Index slid for the fourth straight week, its longest drop since February. Markit Manufacturing PMI will be released at 9:45 AM while Existing Home Sales figures will be out at 10AM.

 

GBP

The Pound strengthened to its best level in a month ahead of tomorrow’s UK Supreme Court decision on the need for Parliament to vote on invoking Article 50. Since Prime Minister Theresa May’s press conference last week, traders are anticipating a more determined path towards an official Brexit.

Although the prospects of banks and other major industries leaving London as a result of inevitable separation remain a serious concern, most investors seem eager to start a process and weigh the effects of a newly “independent” Britain. The Court will have something for us as we start the North American trading session Tuesday morning.

 

JPY

The Yen’s revival is due to markets falling lower with questions over the future of U.S. trade. Also, across the globe many are pondering if the U.S. is going to be able to mend its divisions, which bring a new sense of risk-aversion throughout markets. As a safe-haven, Yen is headed towards bigger gains if populism wins the battle over pragmatism.

Japan’s Prime Minister Shinzo Abe and finance minister Taro Aso are headed to the U.S. soon to discuss the relationship of the two nations, perhaps address policy divergence in matters other than monetary issues. Japan is currently considering adding to its military arsenal, something that has not been possible post-WWII, but getting two thumbs up from America’s new leadership.