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Market Update

EncoreFX’s daily market updates are written by our experienced and professional dealing team.

US GDP Q4 Weaker Than Expected; Trump to Meet With Theresa May

Published January 27, 2017
  • US fourth quarter GDP underperformed with a growth rate of 1.9% vs. a 2.2% expectation; US economic growth is largely underpinned by a healthy increase in consumer spending and greater market optimism
  • Donald Trump will meet with UK Prime Minister Theresa May later today to discuss trade and the UK/US partnership; this will mark the first international diplomatic meeting for Trump
  • Market participants will be curious to hear if Trump’s tone on trade will be aggressive or amiable with May and to see how he will carry the relationship with one of America’s closest and oldest allies
  • Mexican President Enrique Pena Nieto cancelled his trip to Washington yesterday after sharp disagreement on which country will pay for Trump’s border wall
  • These actions show that the new president is willing to disrupt global trade with a major trading partner and cause market volatility over political principle; the USD/MXN handle trimmed some losses after a drop brought on by a proposed 20% tax on Mexican imports
  • Oil prices moved lower as a rise in US production continues to weaken efforts by OPEC to reduce the global supply of oil; investors await US rig count later today

Chart (1) US Quarter on Quarter GDP Growth 2012-Present