With concerns over President Donald Trump’s protectionist trade stance continuing to weigh, the US dollar was trading close to seven-week lows against a basket of major currencies in Thursday’s trading session.
Previously on Wednesday, the leader of the world’s most powerful country gave the go signal of the construction of the promised border wall between the US and Mexico.
Trump prepared to impose stricter restrictions on immigration, such as suspending the entry of any immigrants from Muslim-majority Middle Eastern and African countries and ordered punishment for cities protecting illegal immigrants. Additionally, Trump was anticipated to sign an executive order in the coming days to prevent the entry of Syria refugees.
The president has also expressed that a strong dollar is not in US interests.
The US dollar index, the gage in which the greenback’s strength against a trade-weighted basket of six major currencies is measured, climbed 0.34% at 100.24 as of 10:16 GMT after declining to overnight lows of 99.76, its weakest level last seen on December 8.
So far in January, the index has slipped roughly 2%, weighed by worries over a lack of clarity on Trump’s economic policies since Friday’s inauguration and uncertainties that his protectionist stand could harm corporate profits and act as a strain on growth.
On the chart below, the greenback continues to trade under pressure but in range. The US dollar index failed to take out immediate resistance at 100.40 despite attempting a couple of times. Instead, the level proved to lure in sellers to come back.
Trump’s authorization for the construction of a border wall with Mexico and investor anxiety on US protectionism dragged the dollar index down to hit a new range low at 99.76. The support level stands at 98.92, while resistance is at 100.78.
Nonetheless, after trading near seven-week lows, the dollar consequently recovered ahead of US key data on jobless claims and new home sales, but gains will remain limited.
Greenback pushed higher against Japanese yen, with USD/JPY adding 0.92% or $1.04 to 114.34, hovering above the seven-week lows of 112.51 hit on Tuesday. Meanwhile, the euro retreated. EUR/USD edging lower by 0.30% to 1.0719, not drifting too far from Tuesday’s seven-week peak of 1.0773.
Elsewhere, the British pound was firm after the recently released UK fourth-quarter GDP figures topped estimates; sterling was off 0.02% at $1.2632 near seven-week highs after notching a high of $1.2674.
Official figures revealed that the quarter’s GDP grew 0.6% from the third-quarter and 2.2% from the same period last year. The estimates of 0.5% quarter over quarter and 2.1% year over year were beaten.
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