Home Forex US Dollar Index Higher on White House Tax Reform Comments

US Dollar Index Higher on White House Tax Reform Comments

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The US dollar was higher against other major currencies on Friday, boosted by tax reform comments from the White House and the expected release of consumer sentiment data later today.

The dollar continued to benefit from President Trump’s comments during a meeting with airline CEOs on Thursday. Trump said the administration would announce an ambitious tax reform plan in the coming weeks. No details on the tax plan have been released as of yet.

The dollar advanced against the euro, with EUR/USD falling 0.11% to 1.0647.

The euro remains fragile on growing concerns of a hard Brexit and the election of staunch conservative Marine Le Pen in France’s election.

Some traders may have to rethink their CFD strategies, as political risk in the euro area will affect currencies. Growing fears over the elections in Germany, the Netherlands and Italy are adding to concerns of political uncertainty in Europe.

Meanwhile, the pound held steady against the dollar at 1.2501. Sterling briefly gained against the greenback after the UK Office for National Statistics reported that manufacturing increased by 2.1% in December, beating expectations of a 0.5% gain.

Manufacturing in the UK is up by 4% year-on-year, beating forecasts of a 1.8% increase.

Industrial production is also up, gaining 1.1% in December and beating expectations of a 0.2% rise.

The UK’s trade deficit narrowed to 10.89 billion pounds, beating forecasts of 11.5 billion pounds.

Elsewhere, the dollar eased in Asian trade after a meeting between U.S. President Donald Trump and China’s Xi Jinping eased tensions. Trump said the U.S. would maintain the “One China” policy.

Upbeat trade data out of China also eased growth concerns.

Against the yen, the dollar gained 0.36% to 113.66, but the greenback slipped against the Aussie, with AUD/USD up 0.26% to 0.7644.

January’s dollar-denominated trade surplus in China hit $51.35 billion, far surpassing expectations of $47.9 billion. Exports were up by 7.9%, also beating expectations of a 3.3% increase. Imports were up by 16.7%. A 10% rise was seen.

Yuan-denominated exports were up by 15.9% year-on-year, according to China’s customs. Imports increased by 25.2% compared to the previous year.

The dollar extended its gains against other major currencies overnight after an upbeat jobless claims report and the tax reform comment from President Trump during a meeting with airline CEOs. Jobless claims fell by 12,000 to 234,000 for the week ended February 4. Jobless claims were at 246,000 the previous week.

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Alex Hamilton
 
Alex Hamilton is the HR director of Opteck, a CFD Trading Platform

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