{"id":111092,"date":"2017-08-17T07:30:32","date_gmt":"2017-08-17T11:30:32","guid":{"rendered":"http:\/\/countingpips.com\/?p=111092"},"modified":"2017-08-17T07:05:41","modified_gmt":"2017-08-17T11:05:41","slug":"greenback-took-a-double-hit","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2017\/08\/greenback-took-a-double-hit\/","title":{"rendered":"Greenback took a double hit"},"content":{"rendered":"
August 17, 2017<\/div>
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Article by ForexTime<\/a><\/p>\n

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The U.S. dollar remained on the defensive early Thursday, after yesterday\u2019s declines, led by increased uncertainty over another U.S. rate hike in 2017 and President Donald Trump\u2019s fiscal agenda after abolishing the Manufacturing Council and Strategy & Policy Forum.<\/p>\n

The fall out between Trump and Corporate America was the latest blow to his weakening administration. \u00a0I won\u2019t be surprised to see him losing further support from his key Republican leaders, as a result of the inadequate response to the deadly Charlottesville\u2019s attack. While this does not necessarily mean fiscal reforms are dead, it may slow down progress, and this is bad news for both stocks and the dollar.<\/p>\n

The minutes from the latest Fed meeting showed disagreement over the pace of raising rates. While some are concerned about the recent fall in inflation, others are worried about tightened labor conditions, which will eventually lead to higher prices, and the Fed should not be behind the curve. However, the minutes showed that there is support for starting to reduce the $4.5 billion balance sheet, which could be announced at September\u2019s meeting. The division over the next interest rate hike shouldn\u2019t have been a surprise, given the different opinions we heard from Fed members during last week. However, markets felt the minutes were somewhat dovish, leading to a pullback in the dollar and U.S. yields.<\/p>\n

Unless we start seeing prices heading north, the Fed is unlikely to raise rates again this year, and the dollar will remain under pressure. That\u2019s why investors should keep a close eye on CPI, PCE, and wages data in the months to come.<\/p>\n

Sterling also benefited from the weaker dollar, rising above 1.29, \u00a0after touching a five-week low. However, it wasn\u2019t just a weaker dollar story, the labor market still seems in good shape despite the Brexit drama unfolding. U.K. unemployment fell to a new 42-year low, putting the jobless rate at 4.4%. More importantly, wages grew to 2.1% from 2%, indicating that the tight labor market may have started impacting salaries. Despite real earnings remaining in negative territory, after taking into consideration the effects of inflation, this number is also improving as inflation seems to have peaked in May.<\/p>\n

Today we\u2019ll get to know whether the improvement in employment data will reflect in consumers\u2019 spending habits.\u00a0 Previous data is not encouraging, with the BRC index showing discretionary spending dropping 0.7% over the three months to July. Any surprise to the upside is likely to provide additional support to the pound. Minutes from the latest ECB meeting are also due for release and traders would like to know whether the central bank is concerned about the most recent appreciation in the Euro.<\/p>\n<\/div>\n<\/div>\n<\/div>\n

Disclaimer:\u00a0<\/strong>The content in this article comprises personal opinions and should not be construed as containing personal and\/or other investment advice and\/or an offer of and\/or solicitation for any transactions in financial instruments and\/or a guarantee and\/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.<\/em><\/p>\n

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\"Forex-Time-Logo\"Article by ForexTime<\/a><\/span><\/strong><\/p>\n

ForexTime Ltd (FXTM)<\/strong> is an award winning international online forex broker regulated by CySEC 185\/12 www.forextime.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Article by ForexTime The U.S. dollar remained on the defensive early Thursday, after yesterday\u2019s declines, led by increased uncertainty over another U.S. rate hike in 2017 and President Donald Trump\u2019s fiscal agenda after abolishing the Manufacturing Council and Strategy & Policy Forum. The fall out between Trump and Corporate America was the latest blow to […]<\/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-111092","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/111092","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=111092"}],"version-history":[{"count":3,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/111092\/revisions"}],"predecessor-version":[{"id":111108,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/111092\/revisions\/111108"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=111092"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=111092"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=111092"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}