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Exchange Rates and Forex Today: Friday, July 20
Forex News: The Dollar Interrupts with Trump's Intervention in Fed Policy
After the US dollar index hit a one-year high at 95.65, slid lower after Trump criticized the so-called independent Federal Reserve policies. The US currency is still the second strongest currency this week after the Swiss franc. However, there could be some consolidation in the USD movement today, as the attention of traders could turn to Canada. In particular, the Japanese yen is trading at high levels as risk aversion has risen on the financial markets. These developments point to a rise in short-term prices in the USD / JPY, which could limit the USD bids if there is a major move for this day.
Nevertheless, the USD is still not technically ready to resume the rally at full speed. The EUR / USD is currently at 1.1650 and is still above the recent low of 1.1507. The USD / CHF is currently at 0.9990, and is still below the recent high of 1.0067. Even the AUD / USD has defended the 0.7309 level and is the lowest in the short term, bouncing back from that level. On the other hand, the weakness of the pound sterling has become more pronounced. .
On the other financial markets, the technical indicators in the United States closed in the red zone, the Dow falling by 0.53%, the S & P 500 by 0.40% and the Nasdaq by 0.37% . Intensive sales continued in the Asian session with the Nikkei down 0.70%, the Hang Seng Hong Kong index of 0.54% and the Chinese SSE composite index of 0.12%. The Singapore Strait Times index continues to reverse, up 0.43%. Gold reached its lowest level at 1211.65 yesterday but returned to the pressure at 12.20. Crude oil is recovering and level 70 is back in the spotlight.
The Rally of the US Dollar Stops with Trump's Comments on the Federal Reserve
The US Dollar Ceases to Climb After Trump's Oral Interventions in Politics from the Fed. "I do not like all this business in the economy and I see interest rates rising then," Trump told the Federal Reserve in an interview with CNBC. "We are up and in a ball once we get up, they want to raise bull prices … I'm not happy about that." Trump added that raising the interest rate of the Federal Reserve and the strength of the US dollar does not make the United States of America in a good position. "Nevertheless, I let them do what they think is the best," he said.
The truth is that Trump's comments have been criticized for considering that there is an interference in the Fed's independence. But until now, Powell has given the market enough confidence to do his job in a non-political way. Some economists worry that Trump's comments mean nothing. The US economy is poised to reach nearly 4% of GDP growth in the second quarter, the lowest rate of jobless claims for nearly 50 years and inflation reaching its target level. The strength of the USD reflects the strength of the fundamentals of the economy.
And remember that Economic Counsel Larry Kudlow said that Mr. Tramp had said earlier this week that there would likely be a real economic growth cycle for the United States in the four, five or next six years. Kudlo added that there was no economic recession nearby. Is it time to remove the adjustment of monetary policy to push the interest rate at least to the level of "neutral"?
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