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Sterling Climbs on May Speech and Dollar Drops on Trump Comments

Posted by Joseph Trevisani on Jan 17, 2017 5:23:53 PM

Politics reversed the direction of trading on Tuesday as the sterling rallied and the dollar swooned after British Prime Minister Theresa May laid out her plans to leave the European Union and President elect Donald Trump said the dollar was “too strong”.

The pound climbed more than four figures from 1.2018 to a high of 1.2416 and closed at 1.2014for its highest finish since December 16th and the largest one day gain against the dollar since the financial crisis.

The U.S. currency fell against most peers after Mr.  Trump told the Wall Street Journal that is high worth was partially because China holds down the value of its own currency, the yuan.  

The Bloomberg Commodity Index closed at its best level since July 1st and has gained 2.5 percent in the last five session helped by the weakening dollar which drives up the prices of dollar-based commodities.

American equities retreated. The Dow and the S&P 500 each lost 0.3 percent with the Dow closing at 19,826.77 and the S&P fishing at 2,267.89.  European shares recovered from their earlier losses.

Ms May laid out her government's  plans for leaving the EU and repeated her promise that the verdict of the June referendum would be implemented. Markets reacted positively to the Prime Minister's new assertion that both houses of Parliament would vote on the final deal. 

 

Joseph Trevisani

Chief Market Strategist

WorldWideMarkets Online Trading

Charts: Bloomberg

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bcom jan 17.png

 

 

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