- Trump’s tax plan boosts USD
- Big surprise with data out of Canada
- Yen pushes lower ahead of Abe-Trump meet
- Aussie dollar up with iron
US President Donald Trump announced a “phenomenal” tax plan yesterday, and the dollar is loving it. Trump’s campaign promises of tax cuts and infrastructure spending fueled a stronger USD post-election, but investors had become impatient, nervous that this might never come to fruition which may have fueled the slump in January. This sort of stimulus is just what the doctor ordered for all those betting on a stronger dollar.
As political risks cool and investors stick their heads above ground, the yen continues to give up some of the gains from earlier this week. President Trump’s meeting with Japanese PM Abe kicks off with a press conference at 1 EST and they will continue discussions of US-Japan trade over golf this weekend. This meeting does bear significant risks both ways for USD/JPY depending on how these talks develop.
Canadian businesses added 53,700 jobs in December, a massive departure from the consensus of a 5,000 decline. The details look good too: unemployment moved lower, full- and part-time both grew at a healthy clip.
The Aussie dollar is higher after iron ore prices continue to push higher after strong gains throughout 2016. As a commodity currency, AUD is strongly tied to fluctuations in commodity prices, and as the world’s largest producer of iron ore there is a strong correlation between the price of iron and the AUD/USD value.
EURUSD: Euro weaker as Trump’s tax plan fuels a stronger dollar.
GBPUSD: Sterling weaker on dollar strength.
AUDUSD: Aussie dollar on a steady climb as iron ore prices rise.
USDCAD: Canadian dollar much stronger after positive surprise in Canadian employment