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Trump Drives USD Down; GBP up on Brexit

Published January 17, 2017
  • USD/CAD dropped nearly 1% this morning after President-Elect Donald Trump warned that the US dollar was too strong in an interview with the Wall Street Journal; Trump’s interview focused on USD strength vs. the Chinese yuan
  • The statement, however, caused broad uncertainty on USD under Trump as the USD Index fell to a one month low; this bearish trend was confirmed when a senior member of Trump’s economic advisory council reiterated concerns about the US dollar’s rise at the World Economic Forum
  • Trump also lashed out against the “border adjustment” plan from House Republicans that would have taxed imports and exempted exports; economists argued that this could have automatically spurred a 20-25% increase in the US dollar
  • Theresa May confirmed today that Britain will be leaving the single EU market; May stated that the UK does not want partial membership in the EU and will seek an ambitious free trade agreement on a “fully reciprocal basis”
  • GBP/USD is up nearly 2.5% this morning in reaction to May’s comments; positive UK inflation data and USD weakness also helped spur strength for the pound
  • Crude oil prices have jumped to session tops this morning, lifting West Texas Intermediate to fresh daily highs in the area of $53.30; prices have slightly recovered after price stabilization comments from OPEC Secretary General Mohammed Barkindo

 Charts (1) USD Daily Performance against Major Peers