Currency news: What to expect of the Dollar after Trump’s speech

Currency News

Dollar-Yen exchange rate might explain what is expected for the greenback

The dollar weakened slightly against major rivals Friday as Donald Trump was sworn in as the 45th president of the United States. The greenback, which appreciated sharply following the presidential election in anticipation of pro-growth policies under a Trump administration, has been going down over the past weeks.

However, with the exchange rate for the dollar roaming at 115 yen and the past week’s push higher in Treasury yields, starting to support the dollar again, might help to determine whether the dollar extends its 8 percent growth against Yen since Trump’s victory in November.

Currency News

“A decisive move above the 115.00 figure would signal that the Trump trade is back on and markets are once again betting on substantial U.S. growth,” Schlossberg wrote in a note. “But a failure here would be a sign that the early enthusiasm for Mr. Trump is starting to wane.”

Trump’s greenback is now 14 percent higher than when Barack Obama was sworn in as president eight years ago. The currency gained with Trump’s victory and speculation that his plan will encourage growth and inflation, prompting the Federal Reserve to raise interest rates and make U.S. Treasuries more interesting to international buyers such as the Japanese.

Traders aren’t sure about the government currency preferences after Trump said the dollar is too strong in a Wall Street Journal interview. Later, Steven Mnuchin explained that the long-term strength of the U.S. dollar is important.

If he is going to comment more about the greenback is still a question. In one of the potential public events listed, Trump has been invited to join congressional Republicans during their 3-day issues retreat starting Wednesday in Philadelphia.

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