The US Dollar is recovering after being hit in the overnight hours on concerns that the US President will focus primarily on protectionism and not economic growth. Prior to his inauguration, expectations of a spending frenzy by Donald Trump once he took office had pushed the Dollar Index to a 14-year peak with a gain of more 6%. Investors had anticipated a flurry of spending on infrastructure and tax cuts which would help grow both the US economy and inflation, leading ultimately to a stronger dollar. Now, Trump’s latest efforts have fueled worries that the US economy could instead be harmed.
As reported at 10:25 am (GMT) in London, the GBP/USD was trading at $1.2486, down 0.36%; the pair has ranged from a low of $1.2438 to a peak of $1.2545. The EUR/USD was down 0.3114% to trade at $1.0739, not far from the session trough set at $1.0734. The USD/JPY was higher at 113.2660 Yen, a gain of 0.6111%.
A Look at US Data Today
Later today, markets will turn to the US for the latest results on economic data including the preliminary figures for the Markit Manufacturing PMI for January which is forecast to show an improved reading at 54.5 from 54.3. Also due out is US housing data (existing home sales) and the Richmond Federal Reserve Manufacturing Index.