Fundamental Analysis 2017.09.06 – N. Korean Threats Continue to Plague the Dollar

Renewed missile trails and tit-for-tat threats between the US and N. Korea continue to shake the USD. Most major currencies gained against the dollar – EUR gained 0.026% trading at 1.1921, GBP gained 0.095% to trading at 1.3029, JPY was the one of the biggest winner rising 0.145% (as was expected due to its safe haven status) trading at 0.0092 and CHF was marginally better but still a significant gain 0.147% to trade at 1.0471.
Another factor that could have contributed the weakening of the USD is the statement of three FOMC policymakers that noted they are weary of weak inflation data – and one actual coming out forthright with a statement about delaying an interest rate hike until inflation recovers.

There were yet other policymakers that argued the reason behind slow growth and a sluggish job market was the Fed’s resistance to hike interest rates, so the FOMC’s meeting scheduled towards the end of the month on Sept. 19th and 20th might be combative in regards to the interest rate policy.

Trump continues to push for tax reform urging policymakers on Tuesday to strongly consider lowering tax on companies and individuals to help with the business repatriation effort that the administration has been a proponent of since day one.

Positive – for the dollar news – is the NAFTA members trade ministers claiming to have made headway in regards to the avoidance of the trade agreements disbanding, first claimed as a possibility by President Trump after a meeting with other NAFTA member leaders.

Oil prices raised as refineries sluggishly recovered from Hurricane Harvey with some facilities actually starting to produce refined products. Brent Crude jumped from 52.34 on Monday to 53.39 today and WTI went from 46.73 on Monday to 48.77 at the time of writing this analysis.

This article comprises the personal view and opinion of the STO Investment Research Desk and at no time should be construed as Investment Advice.

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