Dollar Inches Higher in Post-Holiday Trade
With most major markets around the world closed for Boxing Day, only the US market is the exception and should be open in a few hours time. In the FX market, the US Dollar managed to reverse course but FX strategists continue to be wary given the concerns over the Federal government shutdown and growing unease between the Federal Reserve Bank and the White House have sparked a sentiment shift. On Monday, President Trump called out Jerome Powell, whom he appointed to head the US central bank, for raising rates and for its hawkish rate outlook. Essentially, Trump seemed to place the blame for the US economic woes squarely at the feet of the Fed Chairman. Analysts say that the Trump administrations own policies and tax relief for corporations and the rich are really what have played havoc with the US economy.
As reported at 11:30 am (GMT) in London, the USD/JPY was trading at 110.5920 Yen, up 0.3466%; the pair is moving off the session trough of 110.145 Yen. The GBP/USD was trading at $1.2688, a gain of 0.11%, while the EUR/USD was trading at $1.1384, down 0.16%.
Outlook for Greenback Grim
Analysts say that the outlook for the Dollar is negative, with weakness likely to continue. The impasse over the building of a wall on the US southern border is what triggered the government shutdown, and some analysts worry that the deadlock might continue for at least another week. That uncertainty should shift appeal to the safe haven currencies, with the Japanese Yen likely to become the prime beneficiary of risk aversion.