Greenback Dropped, Shares Stay Firm
The greenback has strongly declined as Gary Cohn (White House economic advisor) announced his resignation after he refused to endorse Donald Trump’s decision to impose tariffs on steel and aluminum. USD index hit the minimum of 89.42 and closed over 90 handle. Still, the weakest currency for this week is Loonie. Shares, on the other hand, remain sustained. DOW lifted -0.04% to 24884.12. S&P 500 increased 0.26%. NASDAQ was up 0.26%. Nikkei fell -0.7%. Hong Kong HSI declined -0.35%. The yellow metal broke 1340 handle, but remained inside of short term diapason between 1300/1365.
Lael Brainard (Fed Governor) said tax reform and public spending will provide the economy with a solid boost. Concerning the policy tightening, she noted that: “with greater confidence in achieving the inflation target, continued gradual increases in the federal funds rate are likely to be appropriate.” Philip Lowe (RBA Governor) gave a pretty sanguine outlook for the Australian economy in 2018. The Governor acknowledged improved business conditions and even claimed that RBA might consider a rate hike, but only if there are signs of a pick up in unemployment and inflation. Basically, rates are expected to stay untouched during this year. When asked about Donald Trump’s proposal to impose steel and aluminum tariffs, Lowe answered that this was “highly regrettable and bad policy”.
Australian Gross Domestic Product rose 0.4% qoq in the fourth quarter. Today’s biggest event is Bank of Canada meeting. Members are likely to stand pat, maintaining the rate at 1.25%. Also, Swiss will feature foreign currency reserves, Eurozone will present final Gross Domestic Product of the fourth quarter, US will announce ADP employment, non-farm productivity, trade balance and Fed Beige Book economic report. Additionally, Canada will publish labor productivity and trade balance.