The dollar rose amid an easing of US - Iranian tensions following Pres. Trump’s address
In yesterday’s highly anticipated address, Pres. Trump eased anxieties around the prospect of war as he called for a deal with Tehran to make “the world a safer and more peaceful place”. In response, the dollar and equities rose, and oil returned to previous levels. Several speeches from today from the Fed, BoE and BoC. Markets will listen closely for any signs of change in policy.
“It isn’t enough to talk about peace. One must believe in it. And it isn’t enough to believe in it. One must work at it.”
January 9, 2020
EUR/USD 1.1104 GBP/USD 1.3043 USD/CAD 1.3070 AUD/USD 0.6860 USD/JPY 109.48 USD/CNH 6.9272 USD/ILS 3.4729 USD/MXN 18.77 USD/CHF 0.9724 USD/INR 71.21
The dollar rises for a third straight day alongside equities as US – Iran tensions ease. Six fed speakers are due to speak today and markets will listen for signs of a change in policy. On the data front, Initial Jobless Claims was released this morning showing 214K versus 220K expected.GBPThe pound traded lower this morning after dovish comments from BoE governor Mark Carney saying the MPC is debating the merits of a near-term stimulus suggesting a cut in interest rates. PM Johnson met with EU Commission President Ursula von der Leyen yesterday, with both sides detailing red lines in the coming trade talks.EUR
The euro showed slight gains after German industrial production rebounded in November when it rose 1.1% vs 0.7% expected. Yesterday, ECB President Christine Lagarde used her first speech of 2020 to drive forward greater coordination between the region's policy makers, arguing that such a move would help jump-start the sluggish economy.
Three ECB speakers are scheduled today including Francois Villeroy de Galhau, Isabel Schnabel and Jens Weidmann.CAD
The loonie weakened to the lowest level since the end of 2019 amid dropping oil prices and ahead of a speech by Bank of Canada Governor Stephen Poloz.ASIA/PACIFIC
China’s Vice Premier Liu will travel to DC next week to sign phase I of the US – China trade deal. After phase I is inked, both sides will begin to negotiate phase II where Pres. Trump has stated he will visit Beijing.
JPY is 0.2% lower today – above 109.30 – as speculative short positions are squared.