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.

Free Trading Guides
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
Oil - US Crude
More View more
Real Time News
  • LIVE IN 30 MIN: Join Currency Analyst @ZabelinDimitri as he previews the upcoming week’s main political themes and discusses their impact on the financial markets. Register here: https://www.dailyfx.com/webinars/146770987?utm_source=Twitter&utm_medium=DFXGeneric&utm_campaign=twr
  • RT @scheplick: This week, there were massive protests in: Hong Kong Chile Lebanon Ecuador Haiti Indonesia Spain Libya Iraq France Englan…
  • RT @next_china: China Banks Unexpectedly Keep Loan Prime Rate Steady in October https://t.co/gEsDu1ADAH
  • Commodities Update: As of 02:00, these are your best and worst performers based on the London trading schedule: Silver: 0.03% Gold: 0.00% Oil - US Crude: -0.06% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/rwBMrPXH58
  • #BRL, #COP and the #CLP are expected to be the most active Latin American currencies vs USD with 1-week implied volatilities at 13.40, 10.47 and 9.34 respectively
  • Forex Update: As of 02:00, these are your best and worst performers based on the London trading schedule: 🇳🇿NZD: 0.21% 🇦🇺AUD: 0.06% 🇨🇦CAD: -0.05% 🇪🇺EUR: -0.11% 🇨🇭CHF: -0.12% 🇬🇧GBP: -0.39% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/cJ8uz0usDy
  • How will #Brexit affect the US? Economist @julianHjessop gives his take, only on Global Markets Decoded #podcast. Missed the episode? Get your read here: https://t.co/9SFO9wikRI https://t.co/zQ4Bijk6Up
  • The $USD might be in the process of reversing its two-year uptrend, but technical positioning cautions eager sellers against over-committing. Get your $DXY market update from @IlyaSpivak here: https://t.co/RrifbHfNut https://t.co/VMPintsxrU
  • LIVE NOW: Join Senior Strategist @IlyaSpivak as he discusses the outlook for the financial markets in the week ahead! Register here: https://www.dailyfx.com/webinars/889679267?utm_source=Twitter&utm_medium=DFXGeneric&utm_campaign=twr
  • New Zealand’s Credit Card Spending (YoY) (SEP) Actual: 4.8% Est: N/A Previous: 6.0% #NZD
Trump Policy Guessing Game Continues, Pound to Look Past UK GDP

Trump Policy Guessing Game Continues, Pound to Look Past UK GDP

2017-01-26 08:26:00
Ilya Spivak, Sr. Currency Strategist

Talking Points:

  • British Pound unlikely to find strong lead in 4Q UK GDP data
  • Trump-watching continues to preoccupy the financial markets
  • An augmented “Trump trade” narrative may be taking shape

The British Pound outperformed in overnight trade, seemingly not bothered by an approaching UK GDP report that is expected to show growth slowed in the fourth quarter. The figures are expected to reveal output grew at an on-year rate of 2.1 percent, a downtick from the 2.2 percent expansion scored in the three months to September 2016.

Sterling’s resilience appears to reflect the markets’ increasingly sanguine Brexit outlook. The currency has mounted a swift recovery after Prime Minister Theresa May stuck a conciliatory tone in a speech outlining her vision for the UK/EU divorce mid-month. With that in mind, it would probably take a significantly worse than expected GDP print – an unlikely outturn given recent news flow – to truly sink the UK unit.

Later in the day, a smattering of second-tier US economic data releases is due to cross the wires but the outcomes are likely to pass below the radar as Trump-watching continues to preoccupy investors. Stocks rose yesterday in what the newswires claimed was the return of the so-called “Trump trade” but the US Dollar curiously did not participate in the rally.

The greenback rallied alongside shares in the six weeks after Mr Trump’s surprise election on bets that an expansionary fiscal policy (including new spending on infrastructure, lower corporate taxes and deregulation) will make for richer earnings and boost inflation, spurring the Fed to hike rates more aggressively. The “corporate earnings” bit appeared in yesterday’s price action; the “rate hikes” one did not.

This might imply an evolving view of what a Trump White House may ultimately mean. Deregulation and lower corporate taxes may boost the bottom line but that does not necessarily translate into stronger economy-wide growth, especially if higher trade barriers – another feature of the Trump platform – prove to crimp consumption. The Fed may be far more timid in this case, perhaps explaining soggy USD performance.

On balance, it is far too early to make broad generalizations. A day or two of price action is hardly indicative of a market-wide shift in traders’ assessment of the President’s would-be policy path. Still, the emerging dynamics bear close monitoring and most market participants will likely remain too consumed with hammering out a baseline Trump-era narrative to pay much attention to relatively minor data points.

Join a DailyFX analyst live to discuss the markets – sign up for a webinar!

Asia Session

Trump Policy Guessing Game Continues, Pound to Look Past UK GDP

European Session

Trump Policy Guessing Game Continues, Pound to Look Past UK GDP

** All times listed in GMT. See the full DailyFX economic calendar here.

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com

To receive Ilya's analysis directly via email, please SIGN UP HERE

Contact and follow Ilya on Twitter: @IlyaSpivak

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


News & Analysis at your fingertips.