The U.S. Dollar is down slightly as markets react to swift changes in environmental and energy policies by the Trump administration. Stock indexes worldwide are thrilled America is getting ready to drill and expand its oil production. With projects including the XL Pipeline that are now fully backed by the executive branch, economic growth prospects are only increasing in the eyes of investors. It is possible the Dow Jones hits a record 20,000 after yesterday’s rally improved the NASDAQ exchange to a record high.
As oil became a point of focus, Canadian Dollar appreciated throughout earlier trading sessions. Without any significant data out for release, we will see how the flow of energized markets affects the “buck.” Although many are concerned about a protectionist approach to trade, the dollar may hold on to strength based on higher levels of uncertainty elsewhere.
The Pound had a quick resurrection overnight as the weight of the UK Supreme Court decision was shrugged off. Originally, Sterling lost ground since markets saw the need for parliamentary authorization to start the official Brexit as a detriment to the Prime Minister’s plans to invoke Article 50 by the end of Q1.
The head of state refused to back down in her strategy and is now looking to fast track a bill by forming a big enough alliance to avoid any delays. It seems that along with her conservatives, she’ll also have some already on her side from the Labour Party. Nevertheless, Pound is still under pressure over what a true, not just symbolical, Brexit will mean. Banks and other corporations are leaning towards fleeing.
The Euro remained in familiar ranges, but could face potential downward movement after a poor reading of German confidence. The German Ifo Business Climate survey revealed fears from business leaders when it comes to the sustainability of the monetary union.
Lack of faith in the future could cause outlooks to be downgraded since this measure usually precedes a slowdown in investment and spending activity. We foresee continuing swings for EUR/USD with so many moving parts affecting each region. Trump policies are likely to keep testing the greenback’s vulnerability while upcoming elections weigh over the chances of a less unified continent.