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US Dollar weakens on Trump comments and market correction

Published: Wednesday 10 October 2018

  • US Dollar weakens on Trump comments and market correction
  • Pound pushes higher on Brexit hopes
  • Meaningful progress on Brexit? Pound is wishing and hoping…
  • Major UK data due

​​By Killian Greenwood

US Dollar weakens on Trump comments and market correction
The US Dollar’s rise fell flat yesterday, as the correction in treasury yields and rebounding Italian bonds took their toll on the US Dollar.  US President Donald Trump also helped to weaken the US Dollar further, as he criticised the Federal Reserve’s interest rate hikes once more in a CNBC interview from the White House. He said “I think we don’t have to go as fast”, and, he was “worried about the fact that they seem to like raising interest rates, we can do other things with the money.” On the economy, Trump said “the numbers we’re producing are record-setting,” seemingly in reference to the lowest unemployment rate in around 40 years. He added “I don’t want to slow it down, even a little bit, especially when you don’t have the problem of inflation”. 

Pound pushes higher on Brexit hopes
Sterling improved again as UK Brexit Minister Dominic Raab told Parliament yesterday that the European Council meeting next week will be an ” important milestone” for the Brexit negotiations and expects it to be “a moment where we will make some progress”.  He added that ” negotiations were always bound to be tough in the final stretch”, but remains “confident we will reach a deal this autumn.” 

Meaningful progress on Brexit? Pound is wishing and hoping…
His restrained comments suggest that they are aiming to reach a deal in November rather than October, as not enough progress has been made to date. Raab also reiterated that the Chequers proposal will deliver “frictionless trade with the EU that we have now”. But he urged the EU to do their part and “meet us half way”.
Separately, there were reports that Prime Minister Theresa May’s chief negotiatior, Olly Robbins, has made “meaningful progress” with EU Brexit negotiator, Michel Barnier, on the Irish border issue. But there is no detail on the so called progress, or indeed, the source if the report. Regardless of the truth of the matter, there is definitely more optimism circulating about the Brexit negotiations and the market appears less nervous of a No deal outcome.

Major UK data due
Key UK data will be major focus today, alongside any Brexit news. Monthly Gross Domestic Product (GDP), Trade Balance, and industrial and manufacturing production figures offer insights into the overall health of the British economy.

Later in the day, Canada will release their building permits data and the US will release their latest inflation figures, which could both have an impact on the US Dollar.

Speed Limit

Two policemen are sitting by the side of the A20 checking for speeding motorists, when a Nissan Micra potters along towards them doing exactly 20 miles an hour. There is a long tailback behind it, so the police think they'll have a word with the driver because obstructing the carriageway can be as dangerous as speeding. When they pull the car over, the driver is an elderly lady who looks perfectly sober, but her passengers all look terrified.

"Why are you travelling so slowly?" says one of the policemen.
"I don't understand," says the old lady. "I was doing exactly the speed limit. 20 MPH."
The policeman sees the problem, "No that's the road number, my love. The road is the A20. That 20 isn't the speed limit. The speed limit on this stretch is 60 MPH."
"Oh, I am so sorry," says the old lady. "I'll speed up. Sorry for the inconvenience, officer."
"No problem, " says the policeman, "but what has happened to make your passengers look so traumatised?"
"They'll be OK in a minute or two," says the old lady. "We've just come off the A224."
For more information, infographics and the latest currency insights, visit www.halofinancial.com/news