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Trump comments still weigh heavily on USD

BY BRETT OTTAWA

The Australian dollar maintained a relatively tight 35 point range through trade on Monday bouncing off fresh 7 week highs. Having topped out at 0.7587 the AUD traded between 0.7550 and 0.7580 for much of the session as concerns surrounding the Trump administrations ability to deliver growth promises weighed heavily on the US dollar. Renewed USD selling followed Trump’s “America First” Inauguration address and attentions now turn to the first 100 days of his Presidency as a critical guiding marker of Dollar direction. Despite continued expectations the Republican will deliver fiscal stimulus and pro-growth reforms there is a growing concern the new Presidents aggressive protectionist approach will bully the Dollar lower. This uncertainty opens the door for grander AUD upside with moves through 0.76 and 0.7630 possibly extending toward 0.77. Attentions today turn again to USD sentiment ahead of 4th quarter inflation and core CPI numbers Wednesday.  

The New Zealand dollar extended its rally against the world’s base currency moving through 0.72 U.S cents. Touching intraday highs at 0.7225 the NZD found renewed support in another round of USD selling as investors concerns surrounding President Trumps protectionist “America First” rhetoric weigh heavily on USD outlooks. Since Trumps first public address as President Elect there has been mounting concern the Republican will not deliver on growth promises proffered during the election campaign forcing investors to reshape USD outlooks. The NZD along with the JPY and AUD has been one of the primary beneficiaries of wider USD weakness advancing some 3.5cents through the year thus far.  

The Great British Pound advanced against the US Dollar on Monday on the back of further US dollar weakness as the ‘Trump Trade’ that continues to unravel. The GBP/USD pair is currently trading at 1.2523, its highest since mid- December. We now expect support to hold on moves approaching 1.2450 while any upward push will likely meet resistance around 1.2560. There is no scheduled data release from the UK today. All attentions will turn to this Tuesday, with the release of the January preliminary PMIs and the EU Membership Court Ruling.  

The US dollar edged lower against all of its major rivals on Monday. The greenback still weighed by comments from US President Donald Trump inaugural speech last Friday, emphasising an “America first” approach to foreign policy. The first 100 days of Trumps presidency now looms as a key maker for USD direction. US President Donald Trump overnight abruptly ended the U.S. from the Trans-Pacific Partnership accord with 11 other nations. Attentions now turn a raft of Flash Manufacturing PMI and Flash Services PMI data within the Eurozone tonight. Having opening marginally lower this morning the US dollar is softer versus the Japanese (113.04) whilst steady versus the Euro (1.0746).