020 7898 0500Yesterday was a relatively quiet day in terms of economic data releases in the US, although crude oil stocks fell by more than was expected. This was in contrast to the American Petroleum Institute figures released on Tuesday, which said stocks rose by 897,000 barrels. The Energy Information Administration – a government publication – said that there was a weekly fall of 3.64 million barrels.
More influential than the economic figures was the widely watched speech from Treasury Secretary Steve Mnuchin. The speech confirmed two key policies from Trump’s campaign – the aim for a 15% corporation tax (it’s 35% at present), and a one-time 10% levy on US firms that repatriate offshore funds (estimated to be $2.6 trillion).
Both policies help further the ‘Trumpflation Trade’, which had seen some retracement over the last few weeks. The dollar strengthened accordingly, slightly gaining against the euro but holding steady against sterling.
Later today, the US releases core durable goods and pending home sales – both top-tier data releases, meaning that if they stray too far from their expected results, they could significantly impact the market. As with yesterday, any news from the Trump administration could drive movements in the dollar, as investors react to the policies.
For more on currencies and currency risk management strategies, please get in touch with your Smart Currency Business trader on 020 7898 0500 or your Private Client trader on 020 7898 0541.
