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US Dollar Bullish on Trump Speech

Published January 11, 2017
  • The US Dollar Index continues to rise this morning as investors keenly await a press conference from President-Elect Donald Trump at 11:00 AM EST
  • If Trump focuses on a growth agenda (tax reform and deregulation) while steering away from talks of a border tax and foreign affairs, risk markets are likely to react positively, potentially nudging yields higher in a bear flattening move
  • There are no data releases scheduled in Canada today, leaving CAD to track broader moves in the USD for direction; USD/CAD is currently trading around the 1.3230 – 40 band with the key US Dollar Index trending upwards, flirting with daily tops
  • The important long-term support comes in for USD/CAD at 1.3164 today with 1.3268 serving as resistance
  • Moreover, the currency has failed to respond materially to stronger than expected Canadian employment and trade data on Friday
  • Oil prices are slightly up after Saudi Arabia reported that their oil producers are informing Asian buyers to prepare for a supply cut in the coming months
  • US production continues to keep oil prices range bound in the $50-60 level; the US Energy Information Administration said on Tuesday that American crude production would rise by 110,000 barrels per day
  • The market awaits further details on oil supply with the release of US Crude Oil Inventories at 10:30 AM EST

Chart (1) 2016-2017 Month on Month US Crude Oil Inventories