A hawkish Fed and a dovish European Central Bank gave the edge to the USD this week. Donald Trump scored diplomacy points in Singapore by North Korean leader Kim while trade war fears are once again at the forefront as the Trump administration announced new tariffs on Chinese goods on Friday.
U.S. President Donald Trump pledged on Friday to announce a “phenomenal” tax reform. The first three weeks of the Trump administration did not align with the pro-growth agenda, favoring instead an “America first” protectionism which have weakened the USD. Fed Chair Janet Yellen will testify before the Senate Banking Committee on Tuesday; her take on the U.S. economy will be followed closely by investors.
The defining moment of the week for the USD came as the first press conference of the President-elect Donald Trump unfolded. Few details on topics the market cared like infrastructure spending or fiscal stimulus were shared while the most combative aspects of his campaign were in full view. Inauguration on Friday, January 20 starts the countdown for the first 100 days of the Trump era that is expected to deliver bold action that could see the USD appreciate across the board.
In the weeks after the U.S. election, Mexico’s peso took a hit over uncertainty about the country’s relationship with key trade partners--especially its northern neighbor. This could be a good time for financial professionals at multinationals exposed to the peso to assess exchange rate risk as it relates to payments and transfer activity. We examine the currency’s recent volatility and offers suggestions to better manage payments in the face of these uncertainties.
Markets have been very positive on the new U.S President elect and have been quick to embrace the “reflation” trade over the past fortnight.
Is it too much perhaps? If so, this would suggest that some of the aggressive market moves that we have witnessed across the various asset classes may prove a tad overly optimistic on what can be delivered by the Trump administration.
Fed fund futures are signaling a 95 percent probability of a rate hike when the Federal Open Market Committee meets on December 14. A repeat of last year’ lone rate hike is in the works for 2016. Donald Trump’ election while surprising seems to have brought inflationary expectations that were a concern for the American central bank this year. The minutes of the last FOMC meeting will be released next week and are expected to bring more insights into how close Fed members are to a rate move.
After a surprise outcome, the prospects for the US dollar are suddenly looking a lot brighter—thanks in part to the new administration’s more protectionist attitudes towards the American economy. For multinational companies with dollar-denominated cash flows, a stronger US currency could change the way payables and receivables are handled. With this in mind, we’ve analyzed how post-election FX issues could affect corporate payments and transfers in the months ahead.
New U.S President elect Donald Trump continues to have a massive impact on capital markets.
Global bond markets have lost more than $1 trillion in value; their worst rout in 18-months, on investors bets that Trumps new administration would boost business investments and spending while firing up inflation.
The dollar is higher versus most major pairs as it continues to surge in the aftermath of the 2016 presidential election. The shock victory by Donald Trump is being taken in stride by the market after the initial recalibration of democratic win expectations. The dollar had been higher for most of the year given the Fed’s insistence a rate hike is coming. The comments by president-elect Trump on spurring growth by ending the austerity that has been prevalent in the developed world following the 2008 crisis has boosted the currency and global stocks higher.