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US Dollar Recovers Slightly; Dow Moves Above 20,000

Published January 26, 2017
  • The US dollar bounced back from 7-week lows this morning; the US Dollar Index moved up nearly .55% 
  • Trump’s protectionist stance and lack of information on both tax cuts and fiscal stimulus from the White House have kept the US dollar down in recent weeks
  • Data on US Unemployment Claims, Trade Balance and Wholesale Inventories all showed weaker than expected numbers; these data sets along with New Home Sales at 10:00 AM EST will give some indication on the health of the US economy
  • The Canadian dollar is currently outperforming fellow commodity currencies against the greenback, presenting a good USD buying opportunity before Trump ramps up US fiscal stimulus
  • The Dow Jones Industrial Index topped 20,000 for the first time, breaking through a strong psychological resistance level
  • The market signaled a ‘risk-on’ sentiment amid optimism over Trump’s planned policies and strong corporate earnings
  • European equities experienced similar euphoria, as the EURO STOXX 50, France’s CAC 40, and Germany’s DAX 30 all rose this morning
  • UK’s preliminary GDP showed that the British economy grew by 0.6%, quarter-on-quarter, more than economists had been expecting; this maintained the above-average pace seen in the first 3 months since June’s Brexit referendum

  Chart (1) UK GDP Growth 2012-Present