{"id":100928,"date":"2017-01-18T06:57:39","date_gmt":"2017-01-18T11:57:39","guid":{"rendered":"http:\/\/countingpips.com\/?p=100928"},"modified":"2017-01-18T06:57:39","modified_gmt":"2017-01-18T11:57:39","slug":"dollar-weakens-on-trumps-criticism-of-chinas-weak-yaun-policy","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2017\/01\/dollar-weakens-on-trumps-criticism-of-chinas-weak-yaun-policy\/","title":{"rendered":"Dollar weakens on Trump\u2019s criticism of China\u2019s weak yaun policy"},"content":{"rendered":"
January 18, 2017<\/div>
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By IFCMarkets<\/a><\/p>\n

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US stock indexes slide as dollar slumps<\/h2>\n<\/div>\n<\/div>\n

US financial markets <\/b>closed lower on Tuesday after president-elect Trump criticized China for keeping its currency weak making the dollar \u201ctoo strong\u201d. The dollar slumped after Trump\u2019s comments: the live dollar index<\/a> data show the ICE US Dollar index, a measure of the dollar\u2019s strength against a basket of six rival currencies, closed 1.3% lower at 100.313. The Dow Jones <\/a>industrial average slid 0.3% to 19826.77 weighed by more than 3% drop in JP Morgan and Goldman Sachs shares. The S&P 500 closed 0.3% lower settling at 2267.89 with financial and industrial stocks the weakest performers. The Nasdaq index lost 0.6% to 5538.73.<\/p>\n

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Trump blamed China\u2019s weak yuan policy for large US trade deficits in a Friday interview saying US companies can\u2019t compete with Chinese producers now because US dollar is too strong. The comment hurt the dollar. At his first press conference last Wednesday president-elect provided no details on his policies expected to boost US economy via tax cuts and new spending programs. His remark about negative consequences of dollar\u2019s strength brings the monetary policy back into focus again as investors await more clarity on how Trump\u2019s administration will act on his proclaimed policy preferences. In economic news, the Empire State index for January slipped to 6.5 from an 8-month high 7.6 in December. Readings above zero indicate improving conditions. Today at 13:00 CET Mortgage Applications will be released by the Mortgage Bankers\u2019 Associations in US. At 14:30 CET December Inflation will published, the outlook is positive for dollar. At 15:15 CET December Industrial Production will be released, the outlook is positive. At 20:00 CET the Federal Reserve will release the Beige Book. And at 21:00CET Fed Chair Janet Yellen will speak at the Commonwealth Club, in San Francisco.<\/p>\n<\/div>\n<\/div>\n

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May\u2019s statement alleviates hard Brexit fears<\/h2>\n<\/div>\n<\/div>\n

European stocks <\/b>pared losses on Tuesday helped by UK\u2019s Prime Minister Theresa May\u2019s statement British lawmakers will be able to vote on Brexit\u2019s terms. Both the euro and the British Pound rebounded against the dollar with the Pound jumping more than 3%, largest one-day gain since October 2008. The Stoxx Europe 600 declined less than a point. Germany\u2019s DAX 30 <\/a>slipped 0.1% to 11540.00. France\u2019s CAC 40 lost 0.46% and UK\u2019s FTSE 100 index dropped 1.46% closing at 7220.38.<\/p>\n

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While May said Britain \u201cdoes not seek membership of the single market but the greatest possible access to it,\u201d she confirmed both houses of Britain\u2019s parliament will be able to vote on the final terms of a Brexit agreement worked out by UK and EU officials. May also said she wanted to trade with EU member states as freely as possible. May\u2019s comments supported the Pound and European stocks on expectations UK\u2019s exit terms from EU won\u2019t be as hard as feared. Higher UK inflation data also helped the Pound showing consumer prices rose at the fastest annual rate in more than two years – 1.6% in December from 1.2% a month earlier. In other economic data the ZEW indicator of German economic expectations rose to 16.6 in January from 13.8 in December. Today at 10:30 CET November labor market report will be published in UK, the outlook is positive for Pound. And at 11:00 CET November Construction Output and December final inflation will be released in euro-zone, the outlook is positive for euro.<\/p>\n<\/div>\n<\/div>\n

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Asian markets higher ahead of Yellen\u2019s speech<\/h2>\n<\/div>\n<\/div>\n

Asian stocks<\/b> are mostly up today amid cautious mood before Trump’s inauguration on Friday. Nikkei ended 0.4% higher today at 19894.37 rebounding from five-week lows as the yen weakened against the dollar with investors awaiting Fed chair Yellen\u2019s speech later today. Chinese stocks are advancing with stronger yuan after Trump\u2019s criticism of Beijing\u2019s devaluation policies increasing attractiveness of Chinese equities. The Shanghai Composite Index is 0.1% higher and Hong Kong\u2019s Hang Seng index is up 1.2%. Australia\u2019s All Ordinaries Index fell 0.4% with Australian dollar pulling back from one-month high against the dollar.<\/p>\n

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Oil prices rise on weaker dollar<\/h2>\n<\/div>\n<\/div>\n

Oil futures prices <\/b>are edging higher today as weaker dollar makes it less costly for users of other currencies, boosting the demand for the commodity. At the same time concerns US crude output may rise as prices go up limit the gains in oil. US government report said on Tuesday US oil production is set to rise towards 9 million barrels per day, forecasting a monthly rise of 41000 barrels a day in February oil production to 4.748 million barrels a day from seven major US shale plays. The March contract for Brent crude oil fell 0.7% to $55.47 a barrel on Tuesday.<\/p>\n

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Note:
\nThis overview has an informative and tutorial character and is published for free. All the data, included in the overview, are received from public sources, recognized as more or less reliable. Moreover, there is no guarantee that the indicated information is full and precise. Overviews are not updated. The whole information in each overview, including opinion, indicators, charts and anything else, is provided only for familiarization purposes and is not financial advice or \u0430 recommendation. The whole text and its any part, as well as the charts cannot be considered as an offer to make a deal with any asset. IFC Markets and its employees under any circumstances are not liable for any action taken by someone else during or after reading the overview.<\/p>\n","protected":false},"excerpt":{"rendered":"

By IFCMarkets US stock indexes slide as dollar slumps US financial markets closed lower on Tuesday after president-elect Trump criticized China for keeping its currency weak making the dollar \u201ctoo strong\u201d. The dollar slumped after Trump\u2019s comments: the live dollar index data show the ICE US Dollar index, a measure of the dollar\u2019s strength against […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-100928","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/100928","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=100928"}],"version-history":[{"count":2,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/100928\/revisions"}],"predecessor-version":[{"id":100940,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/100928\/revisions\/100940"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=100928"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=100928"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=100928"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}