2017–01–11 Trump Speech
What a day today. The markets started pricing in a hawkish speech from the president elect, Donald Trump, and the dollar Index climbed back to highs. While Rex Tillerson, Exxon C.E.O., Chosen as Secretary of State was answering answers at the confirmation hearing the US rally even picked further steam.
The eurusd made a low at 1.0453, the pound at 1.2038, the New Zeeland dollar at 0.6960, the Australian dollar at 0.7352. Safe haven assets where dumped and Gold reached a low at 1177 and Silver 16.52 with the usdyen reaching a 116.88 high.
As soon as Trump started to talk, his attitude and tone and how he addressed the media, and the lack of information about fiscal policy disappointed the markets with the dollar immediately starting to fall. From it’s high at 102.95 it fell to 101.22. The eurusd turned north as fast as the Index and crossed the 1.06 figure. The pound went up 250pips and the usdyen fell 260 pips.
I see many of you guys asking what happened today? Why the euro is up?
Well, you need to check your Forex Calendar and learn and understand that the markets are something global, and that macro economics and politics have a huge impact.
What moves the market, isn’t it money?? And who has money? People, rich people, bankers and companies and big funds…
Money and politics are entangled! Why would many of you ask?
Well, money can buy many things, but you cant make laws without politics. And that's why politics have such a big importance in the financial world!
Now when the next most important man, leader of the “strongest country and economy” (notice some sarcasm here), will have a speech, expect the markets to be volatile! The economy is how it is, shrinking and the FED has lost quite some credibility, we also know that Trump wants a weaker dollar, it is better for exports and tourism, is Trump a reliable man for the big money guys, or is he a rogue man…everything affects the market and it’s sentiment. Many times the big guys try to fool us and before Trump we saw a strong up rally on the dollar, but as soon Trump started speaking you can’t fool anyone any longer.
Most of times the market moves with the rumors and then on the news it corrects, and we have seen it today very sharply. Trump was not able to convince anyone that he will help the economy to grow, that he will be good to resolve conflicts and the markets do not like uncertainty.
Trump has his staff ready and will take place next week, so let’s see what will actually be his laws and changes and how it will affect the current sentiment. Will the US Index stay above its 100 level or will we see levels below again??
Be safe and inform yourselves.