February 21, 2018

Draghi opens fire at United States dollar policy

26 January 2018, 05:25 | Virginia Santiago

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This week, US President Donald Trump put the Buck under more pressure as he began to implement tariffs on items such as solar panels and washing machines and it's no real surprise the Buck backed off as trade disputes have caused United States dollars exchange rate softness in the past.

Recent comments from US Treasury Secretary Steve Mnuchin have sent the dollar to three-year lows this week.

After the close of trading on Thursday, results are expected from Intel Corp and Starbucks Corp. That said, Kohli pointed out that Japanese flows recently have been positive, with yield spreads between US and foreign debt generally wide, suggesting there could be demand after all.

The dollar sank to a three-year euro low Thursday after a top member of Donald Trump's cabinet talked down the currency, while European Central Bank chief Mario Draghi warned that exchange rate volatility was as "source of uncertainty".

As if a euro driven upwards by a strengthening economy were not enough, the European Central Bank must also contend with comments from Mnuchin that pushed the dollar down, whether or not they were intentional currency manipulation. The volatility risks spurring a reassessment of the global risk-on rally that's stretched valuations across asset classes.

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Then on Thursday, the US President stated that he actually favoured a strong US Dollar and predicted that the currency would get "stronger and stronger".

"Draghi failed to surprise the market", Jane Foley, head of foreign exchange strategy at Rabobank, told CNBC over the phone. "The market can easily imagine the idea that this White House might well change its stance on the currency". Trump is scheduled to make an address in Davos later this week.

The U.K. House of Lords is considering Prime Minister Theresa May's Brexit bill this week.

Djokovic overcomes injury scare, defeats Viñolas at Australian Open
While Konta and Muguruza were beaten in Melbourne , world No.1 Simona Halep was in top form as she beat Eugenie Bouchard 6-2, 6-2. We use cookies to give you the best experience on our website and bring you more relevant advertising.

According to Thomson Reuters data through Wednesday morning, earnings growth for the S&P 500 is expected at 12.4 percent.

Two-year bond yields hit minus 0.56 percent.

Kospi futures increased less than 0.05 percent to the highest in more than 11 weeks.

Consumer confidence is predicted to have risen in January, but economic sentiment and industrial sentiment readings are tipped to decline.

Dow e-minis were up 62 points, or 0.24 percent, with 26,221 contracts changing hands.

Mnuchin's comments drove further losses in the dollar on Wednesday, which gave the currency its biggest daily percentage drop in seven months. The trade-weighted euro is up 1% to 1.5% since mid-December, and this gain will likely further weigh on inflationary pressures.

Shanghai ended down 0.3 percent, while Sydney fell 0.1 percent and Singapore eased 0.9 percent.

Gold was up at $1,366, within touching distance of its highest since July 2016.

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