With the currency markets moving every two seconds, it can be vitally important to be aware of what is driving the currencies in or out of your favour. Click here to see live exchange rates.
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The US economic outlook is strong. There has been positive data of late. Huge tax cuts are shortly to be implemented which has caused many Americans to have more faith in the Trump administration, how this will impact the economy is uncertain however.
We have recently had a rate hike in December which brings the US interest rate levels in line with some of the most favourable of the developed nations. Despite a slightly less aggressive plan of rate hikes than expected in the US the outlook is favourable.
We have also recently witnessed the US stock market hit a record high following the new tax cuts. So what is calling US Dollar weakness at present?
There are obviously several attributing factors, one of which could be the slightly restrained plan for rate hikes by the Federal Reserve. There is an element of uncertainty surrounding how the new Fed chair, Jerome Powell will fair.
However, I think the Trump factor is weighing on the Greenback. He has recently threatened to withhold aid from Pakistan accusing Pakistan of harbouring terrorists. This was confirmed by US ambassador for the United Nations, Nikki Hayley who accused Pakistan of playing “a double game for years” and stated the administration would withhold USD $255m in foreign aid. On January 3rd Donald Trump also tweeted the following:
North Korean Leader Kim Jong Un just stated that the “Nuclear Button is on his desk at all times.” Will someone from his depleted and food starved regime please inform him that I too have a Nuclear Button, but it is a much bigger & more powerful one than his, and my Button works!
— Donald J. Trump (@realDonaldTrump) January 3, 2018
Nonfarm payrolls presents the number of new jobs created during the previous month excluding the agricultural sector. The release takes place on the first Friday of the month and is historically very difficult to predict. If you want to take the uncertainty out of your trade perform it before this announcement.
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