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The greenback fell yesterday, negatively affected by Trump’s first formal press conference since winning the presidency in November. Trump said, he would resign from all positions linked to the Trump organisation, this move however saw a lot of people saying it was not enough to remove conflict of interest in the White House. On the other hand, Donald Trump accused the U.S. intelligence of leaking 'fake' news about his relationship with Russia. In addition, Trump acknowledged that Russia and China were behind hacking activities during the 2016 presidential election.

The Greenback declined as Trump disappointed investors who wait for clear signals about the US economic outlook.

The U.S. dollar index fell as much as 0.25%, to settle at 101.75 pips.

Gold prices rose by 0.5%, to settle above $1,190, boosted by weak USD.   Technically, the yellow metal could settle at its current levels and hit the psychological level of $1,200.

Elsewhere, the U.S. bond yields declined yesterday, negatively affected by trump’s first formal press conference amid uncertainty over how the new U.S. presidential administration will execute plans for the U.S. economic growth

USD declined vs. JPY and settled at ¥115.50. Technically, it could fall to the psychological level of ¥115.

EUR and GBP recovered yesterday vs. USD, positively affected by a weak USD.

Oil prices rose as much as 2.5% yesterday, on news that Saudi Arabia cut exports to Asia. U.S. crude rose to $52.50, although the U.S. crude inventories rose by 4.1 million barrels last week, unlike the expectations for an increase of 1.2 barrels. Technically, the U.S. crude could fluctuate more during the next period, due to conflicting news about the oil deal cut.

On Thursday, the Greenback fell against a basket of major currencies, one day after the press conference held by Trump, as he did not mention any of his economic plans. The U.S. dollar index declined to 101.40, the lowest level in a year.

Gold pared early gains and failed to settle above the psychological levels of $1,200. A close above $1,200 should be taken as bullish for the yellow metal as it could gain more next week, before the U.S. president-elect Donald Trump moves into the White House. 

Euro expanded its gains and settled at $1.06 as German GDP grew at fastest rate in five years. Europe's largest economy grew by 1.9% in 2016, beating economists’ expectations of 1.8.  Technically, the common currency could hold at $1.06 during the day.

Sterling pound pared its gains vs. USD, recovering from 31-year low, thanks to a weak USD. Technically, it is unlikely to trade at such high-levels for a long time, due to the current political situation.

Oil prices continued their rise after Saudi Energy Minister Khalid al-Falih said the Kingdom had cut production to its lowest in almost two years. In February 2015, Saudi Arabia increased its oil production to hit U.S. shale oil producers. U.S. crude rose as much as 1.5%, settled at $53, and could maintain its gains until the end of the day.

The most important economic events:

  • USD Advance Retail Sales (DEC): (GMT: 15:30) – important – Forecast (0.7%) – Previous (0.1%).
  • USD U. of Michigan Confidence (JAN P): (GMT: 17:00) – important – Forecast (98.5) – Previous (98.2).

Disclaimer
The prices and news mentioned in this outlook are absolutely no guarantee of future market performance and do not represent the view of ICM Capital Limited. Financial markets can move in either direction causing profits to be made or complete losses to be incurred by the trader. Each trader must decide for themselves what their risk appetite is and ensure that correct risk management procedures are in place before placing any trades.

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