The dollar’s poor week continued during yesterday’s trading session, as weaker than expected jobs data coupled with uncertainty surrounding tax reform and public spending took its toll on the greenback. Unemployment claims rose by 6,000, more than the expected 4,000 for the week ending February 18th, going against recent strong jobs releases. Meanwhile, new US Treasury Secretary Steven Mnuchin’s comments were also not received well by markets, telling the Fox Business Network that any policy steps the Trump administration takes would have a limited impact this year and that he wanted to see tax reform passed before Congress’ August recess. The aim is to focus on middle-income tax cut and simplification for business, with no further clues on this markets were disappointed who have been expecting the Trump administration to deliver on promises of tax reform, infrastructure spending and a cut in regulation. Whilst broadly in line with recent comments made by other politicians, meeting expectations, but disappointing the bulls who were hoping for more details and a more rapid reform. This stance is likely to limit dollar strength in the short-term. Cable is currently trading at 1.2550, up from 1.2450 at the beginning of yesterday’s European session.
The Sterling is ending the week in a strong position, as modest retail sales data coupled with negativity from France (Le Pen’s potential to make the second round of voting), and the States (FOMC Minutes and jobs data) have seen it stay above recent resistance levels of 1.18 and 1.25.