After the US missile strikes in Syria, the dollar dropped against the safe-haven yen during the Asian trading session. The US currency had already been on the back foot due to chances of Donald Trump’s fiscal stimulus evaporating.
Yesterday markets also focused on Trump’s meeting with his Chinese counterpart Xi Jinping, the first meeting between the two leaders. Topping the agenda at Trump’s Mar-a-Lago resort in Florida will be whether he uses US-China trade ties to pressure Beijing into doing more to rein in its nuclear-armed neighbour North Korea.
In other news, US House of Representatives speaker Paul Ryan said that there was no consensus on tax reforms and that it would take longer to accomplish than healthcare. Given Trump’s failure to reform healthcare, this put pressure on the dollar.
Yesterday’s data showed that new claims for US unemployment benefits had tumbled by the largest amount in two years. Applications declined by 25,000 to 234,000 for the week ended 1st April. This represents the biggest fall since April 2015.
Non-farm jobs data will be released later today, which is expected to show that US companies added around 185,000 jobs in March, down from 245,000 in February.
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.