WHY DOLLAR BULLS ARE SALIVATING AGAIN.
Photo credit: kingworldnews.com
Dollar bulls are rubbing their hands to have a go once again on the premises’ of President Donald Trump promise of tax cuts, ‘good news’ from the courts, a better than expected data from China and Shinzo Abe visit to the White House, coupled with a hawkish Janet Yellen makes it more appetizing.
It looks like all is falling in place for a big rally for the
USD/JPY today and in the coming weeks. There was a fresh gift of optimism for
investors and traders when President Trump said he has something ‘phenomenal’
on taxes in the next two to three weeks as he interacted with Executives of
Airlines.
It was this same form of optimism from the campaign trail
that led to a more than 5 percent rise of the dollar against it six major competitors’
after he was elected into office. At the time the dollar rose on 8/11/2016 to
11/12/2016 stretching more than a month of persistent rise until the President
turned more of his attention on trade protectionism and his immigration stunt.
On Thursday, the Federal Appeal Court rejected to reinstate
the executive order temporarily banning people from seven Muslim-majority
countries from entering the United State. The unanimous rule stem from the
administration failure to offer evidence of threat to national security. In its
ruling, the court said government had so far failed to show that any person
from the seven countries had perpetrated a terrorist attack in the United States.
Although, the administration has an open window to appeal or
take the matter to the Supreme Court, for investors and traders, this ruling from
the Appeals Court gives a waiver of sanity and brings to an end the panic it
provoked. Investors and traders are happy the strength of political noise is
weighing down.
Today on the market, there is a full plate of data coming
from the US which include; Michigan Consumer Expectation/Sentiment for February.
There is also an eye on Shinzo Abe, the Japanese Prime Minister visit to the
White house.
Any negative headlines coming from the meeting between the
two will choke the rally of the dollar.
From a technical view, as at the time of filing this piece
the USD/JPY was trading at 113.600 from a daily high of 113.851 perhaps, due to
better than expected data from China during the Asian open.
The dollar index which measures the strength of the dollar
against six major currencies pairs was firmer around 100.80 from a daily high
of 100.87.
DISCLAIMER: THIS ARTICLE IS BY NO MEANS AN INVESTMENT ADVISE.
THERE ARE GREAT OPPORTUNITIES IN FOREX TRADING AS WELL AS RISKS. THIS PIECE AND
ALL ARTICLES ON THIS BLOG ARE FOR INFORMATIONAL PURPOSE.
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