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Trump Political Controversy Drives USD Down

Published January 31, 2017
  • President Donald Trump continues to dominate the news with the recent firing of US Attorney General Sally Yates for issuing an order against the recent immigration ban
  • This increasing US political uncertainty and international backlash towards the Trump administration is causing investors to question whether or not the US economy will indeed meet the central bank’s inflation targets
  • As a result, the US Dollar Index is down this morning as the greenback endures increasing bearish pressure; the euro is performing especially well against the US dollar
  • Consumer Price Index, Preliminary GDP and Unemployment Data out of the euro zone all showed positive results, indicating that the dovish monetary policies of the European Central Bank are consistently spurring economic activity
  • Canadian month-on-month GDP data showed that the local economy grew slightly more than expected (0.4% actual vs. 0.3% expected); Canadian raw material prices increased by a large margin as well, indicating positive news for inflation
  • Bank of Canada Governor Stephen Poloz will speak at 5:35 PM EST at the University of Alberta School of Business to discuss “The Art of Making Monetary Policy”; traders will look for any direct comments on future interest rate decisions for Canada
  • The Bank of Japan kept its interest rate steady at -0.10% while keeping the same inflation forecasts for 2017; Japanese officials raised growth estimates due to brightening prospects for exports

Chart (1) Euro Area GDP Growth Rate