News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Bullish
Oil - US Crude
Bullish
Wall Street
Bullish
Gold
Bullish
GBP/USD
Mixed
USD/JPY
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Silver are long at 88.94%, while traders in Wall Street are at opposite extremes with 80.44%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/WWeIIheTYs
  • Forex Update: As of 05:00, these are your best and worst performers based on the London trading schedule: 🇬🇧GBP: 0.16% 🇪🇺EUR: 0.09% 🇨🇦CAD: 0.08% 🇦🇺AUD: 0.03% 🇯🇵JPY: -0.05% 🇳🇿NZD: -0.06% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/FLxOjdw4th
  • 🇯🇵 Leading Economic Index Final (DEC) Actual: 95.3 Expected: 94.9 Previous: 96.1 https://www.dailyfx.com/economic-calendar#2021-02-25
  • Indices Update: As of 05:00, these are your best and worst performers based on the London trading schedule: Germany 30: 0.58% France 40: 0.54% FTSE 100: 0.39% Wall Street: 0.34% US 500: 0.27% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/TDT69DjXeV
  • S&P 500 Rally May Lift Hang Seng, ASX 200 on Dovish Fed, 3rd US Vaccine. https://www.dailyfx.com/forex/market_alert/2021/02/25/SP-500-Rally-May-Lift-Hang-Seng-ASX-200-on-Dovish-Fed-3rd-US-Vaccine.html https://t.co/w22gDJEcXa
  • 🇯🇵 Coincident Index Final (DEC) Actual: 88.3 Expected: 87.8 Previous: 89.0 https://www.dailyfx.com/economic-calendar#2021-02-25
  • RT @FxWestwater: Crude Oil Price Forecast: Demand and Supply Drivers Firing on All Cylinders Link: https://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/commodities/2021/02/25/Crude-Oil-Price-Forecast-Demand-and-Supply-Drivers-Firing-on-All-Cylinders.html?CHID=9&QPID=917708&utm_source=Twitter&utm_medium=Westwater&utm_campaign=twr https://t.co/5…
  • Consolidation or bull flag? A bull flag is a continuation pattern that occurs as a brief pause in the trend following a strong price move higher. Learn how to better spot these formations here: https://t.co/yOEvLjKnct https://t.co/YKS41u2Ptg
  • Risk appetite has spread heading into Thursday trade with more than just the SPX taking the lede. GameStop ($GME) is back in the top performance depth chart. What does this mean for trends ahead? My analysis: https://www.dailyfx.com/forex/video/daily_news_report/2021/02/25/GameStop-Commands-the-Speculative-Headlines-as-SP-500-and-Yen-Crosses-Rally.html?ref-author=Kicklighter&QPID=917719&CHID=9 https://t.co/54seZPSCN0
  • Heads Up:🇯🇵 Coincident Index Final (DEC) due at 05:00 GMT (15min) Expected: 87.8 Previous: 89.0 https://www.dailyfx.com/economic-calendar#2021-02-25
USD Slammed to New Lows as US Protectionism Gains Steam

USD Slammed to New Lows as US Protectionism Gains Steam

Christopher Vecchio, CFA, Senior Strategist

Talking Points:

- Comments by US President Trump's Commerce and Treasury Secretaries have the US Dollar at its lowest level since December 22, 2014.

- Protectionism is generally bad for economies, and can lead to a litany of problems - domestic and foreign - beyond economics.

- Retail trader sentiment continues to point to a tough trading environment for the US Dollar.

Upcoming Webinars for Week of January 21 to 26, 2018

Thursday at 7:30 EST/12:30 GMT: Central Bank Weekly

See the full DailyFX Webinar Calendar for other upcoming strategy sessions

Yesterday we examined the early warning shots fired in what appears to be the opening stages of a shift towards US protectionism. Today, a new round of fire was exchanged, sinking the US Dollar (via the DXY Index) to its lowest level since December 22, 2014.

Two comments in particular stand out today, each made by US President Trump cabinet officials at the Davos World Economic Forum. US Treasury Secretary Treasury Steve Mnuchin said that "Obviously a weaker dollar is good for us as it relates to trade and opportunities," a rather public departure from the 'strong dollar policy' of the past twenty-plus years. The strong dollar policy implied little interference on the fiscal side of things, but it now appears that threshold is going to be crossed.

The other comment made today was by Commerce Secretary Wilbur Ross, who said "Trade wars are fought every single day... So a trade war has been in place for quite a little while, the difference is the U.S. troops are now coming to the rampart." It seems the opening salvos were just fired earlier this week with the tariffs on solar panels and washing machines, then.

Accordingly, with US protectionism starting to pick up steam, a number of USD-pairs are hitting multi-month highs or lows today on the back of the commentary:

USD Slammed to New Lows as US Protectionism Gains Steam

Some thoughts on protectionism broadly. Generally speaking, tariffs are “good in theory,” but “terrible in practice.” The theory is, “protect domestic industries,” but in practice, it means “enriching a small segment at the expense of the broader economy.” Adam Smith espoused this point in A Wealth of Nations just as John Meynard Keynes did in The General Theory of Unemployment.

Accordingly, there are three main takeaways for why protectionism via tariffs/limiting free trade is bad:

1) Protectionism ends up with a bias because it serves to protect “domestic producers in competition with foreign producers.” This means protectionist policies like a tariff favor industries in competition with foreign manufacturers over those that are not.

2) Protectionism, by its nature, leads to political artifice. Only those in preferred industries – with their goods protected – benefit from tariffs (profit margins are kept intact or boosted), but the costs – retaliatory tariffs from foreign governments or lack of access to cheaper, substitute goods – are shared by society.

3) Protectionism leads directly to political corruption, as politicians become pressured to start protecting every industry. Corporate executives will want to protect their profit margins, after all.

See the above video for a technical overview of the DXY Index, USD/JPY, EUR/USD, GBP/USD, USD/JPY, USD/CHF, Gold, and the S&P 500.

Read more: USD & JPY Get Haven Bids as Trump Protectionism Returns

--- Written by Christopher Vecchio, CFA, Senior Currency Strategist

To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com

Follow him on Twitter at @CVecchioFX

To be added to Christopher's e-mail distribution list, please fill out this form

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES