06.02.2019: Traders unimpressed by Trump’s speech in Congress (USDX, USD/JPY, AUD/USD)
Ahead of Donald Trump’s appearance in Congress, the US dollar was rising. However, the President made no startling statements during his State of the Union address.
Mr. Trump announced his plans for the year ahead, having outlined the need to build a wall at the border with Mexico. As for trade relations with China, he said nothing new.
Nonetheless, investors continued buying the greenback during trading in Wall Street. The US dollar index rose above the level of 96.20 by the end of the American session.
Later on, in the Asian trading session, the American currency retreated. The USD/JPY pair declined by 0.3% on Wednesday and settled near 109.70.
Though Donald Trump said nothing new about trade relations with China during his speech in Congress, market participants received news about another round of talks between US and Chinese officials. The negotiation is to be held next week. This factor boosts demand for the safe-haven assets.
Therefore, risky assets lose ground. The Australian dollar shed over 1% during the Asian-Pacific trading session, but the upcoming US-China talks did not cause this fall. The AUD/USD came off the level of 0.7140 after the RBA Governor expressed his view on the future monetary policy.
Philip Lowe’s comments made market participants think that the interest rate may be reduced. These thoughts were caused by political events that have a profound impact on the global economic development. So, it would be unreasonable for the Reserve Bank of Australia to tighten its monetary policy now.
Today the Australian dollar as well as other opponents of the greenback may decline even lower, as later in the day the United States is due to deliver a bunch of key economic reports.
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