Wall Street equity index kept on renewing peaks, while the US Dollar gained bidding momentum on the Trump pledged to unveil a complete overhaul of taxation system within the next couple of weeks. This news came to life on the meeting with the heads of US air carriers.
Talking about changes in taxation Trump said it will be something “phenomenal”, yet he provided only scarce details saying that the plan includes major cutbacks on taxes that are (by his words) “so important for American businesses”.
These hints were a breath of fresh air into the Wall Street trades sending them to new peaks while caution on currency markets eased after long-awaited cues from the new US administration, triggering abrupt Dollar rally.
The Dollar index strives to advance to the 101 level during the Friday trading, which means that the currency is closing the week on a positive note. If there is success with such a manoeuvre, then the rally extension may be the case in the next weeks. Overall, Dollar bids are primarily orchestrated by the rule of “buy on the rumours”, as the release of Trump’s tax plan is set up to frustrate some investors, making the Dollar trades subject to the second rule, which is “sell only on facts”.
Investors’ concerns were soothed significantly after the White House announcement on tax cutbacks. The yields of the French bonds, which had been decreasing since the 6th of February returned to growth amid the fears of a ultra-right party candidate running for presidency. The defensive assets trimmed down gains while the precious metals also went into decline, for an example Gold halted on the weekly advance retreating to 0.8%.
The Sterling and the Euro continued to move on a sideline manner, as some investors are unwavering on the expectation of a pullback on the US markets. Both currencies continue to remain in the range of 1.24 – 1.2550 and 1.06 – 1.07 with attempts of a downward breakout, anticipating the fundamental print of the market to be filled with details on fiscal and tax policies of the US government.
The Oil prices rose 1% on Friday, flushed by OPEC statements on the need for further production cuts, as well as, the growth of commercial stocks in the US, indicating an accelerated production and expectations of price increases by the US producers.
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