It was a bad day for the US dollar and US equities yesterday. The US dollar index fell around 0.77 percent and the main US indices - Dow Jones, Nasdaq and S&P 500 - fell close to 2 percent while markets continued to digest the latest Fed release. The icing on the cake was oil's 4.4 percent slide. The mood did not improve when President Trump threatened to veto the spending bill because it does not include funding for the border wall.
However, this morning, the US dollar index is rising 0.25 percent, which looks more like a relief rally. Note that the US dollar hasn’t suffered that significantly in the past when the US government was shut down.
On the release side, the gross domestic product annualized (in the third quarter) came in at 3.4 percent, lower than the expected 3.5 percent. The US durable good orders for November came in at 0.8 percent versus the 1.6 percent expectation. In addition to that, the revised data released showed consumer spending rose at a slightly slower rate last quarter and exports declined more sharply — no good news overall for the US dollar, but financial market prices are moving ahead of economic data and fundamentals as usual.