New US Treasury Secretary, Steven Mnuchin comments on US Interest Rate and Fiscal Stimulus.
This article is originally referred from FXPrimus News.
Trading Ideas For The Day – Marshall’s Daily Digest. Today’s trading ideas…
Dollar should bounce back
The dollar was hit overnight by US Treasury Secretary Mnuchin’s comments about interest rates and fiscal stimulus.
But these comments were only common sense.
The Fed has been downgrading its estimate of the long-term equilibrium level of rates for a long time, while everyone knows how the US budget process works.
The dollar should bounce back, in my view, particularly vs EUR and JPY.
GBP buying overdone
On the other hand, I think the rally in GBP yesterday was overdone.
Signs of trouble are mounting: talk of a EUR 60bn Brexit bill and UK retailers planning price hikes. I think profit-taking today is likely to trim GBP’s gains.
USD down on Mnuchin comments
The new US Treasury Secretary, Steven Mnuchin, said in an interview that the US should consider issuing ultra-long Treasury bonds because US interest rates are likely to stay low for a long period.
He also said the effects of fiscal stimulus on the economy may be limited this year.
The dollar fell as a result.
GBP up, EUR down
Sterling was the main gainer among the G10 currencies as traders dug deeper into Wednesday’s revised Q4 GDP and reassessed their views on the UK economy.
A better-than-expected CBI retail sales figure for February helped reinforce the idea that the UK consumer would continue to support the economy.
The EUR weakened on continued worries about the upcoming elections in the Netherlands and France, although gains by the centrist candidate Emmanuel Macron have helped EUR to recover somewhat.
GOLD, OIL up
The weaker dollar helped gold rally. Silver rose even more.
Oil rose during the day but lost some, but not all, of the gains after the DoE figures showed a rise in oil inventories in the latest week, contradicting the API’s estimate of a decline.
BBA loans for house purchases; Canada CPI; US new home sales.
Popular FX Pairs over the last 24 hours
Original Source: FXPrimus News