Dollar rises, stocks pare gains after Trump talks up US currency

Dollar rises, stocks pare gains after Trump talks up US currency

President Donald Trump waded into the uproar over the US currency Thursday, saying he wants to see "a strong dollar", countering comments by his treasury secretary that appeared to signal the opposite and sent the greenback plunging to three-year lows.

The dollar index against a basket of six major currencies was at 89.034.

Note that the BOC has raised interest rates at its last policy meeting on January 17 and an unexpected increase in inflation could motivate BOC policymakers to apply further monetary tightening. That's the message that's also coming out of the White House, which sought to assert its control over US currency policy following Mnuchin's initial remarks amid a day of oscillating messages that spanned two continents.

"Any time we have these types of trade frictions it's going to put more negative sentiment on the currency", said Minh Trang, senior currency trader at Silicon Valley Bank in Santa Clara, California.

The question is, how much influence does a president have on currencies?

He added that Mnuchin's comments had been taken out of context, and that just because the Treasury chief had said a weak dollar was good for trade did not mean he supported a weak dollar.

Foreign exchange analysts, however, said there are more reasons for the dollar decline than the top U.S. leadership's words.

Earlier, U.S. Treasury Secretary Steven Mnuchin said that the U.S.is ready to negotiate an "attractive" trade deal with Britain once the country has left the EU. A slight moderation from an annualised 3.2% to 3% is predicted.

"They want to walk back yesterday's comments".

We also have December durable goods orders which are expected to show a rise of 0.9%, down slightly from 1.3% in November.

Next up for U.S. traders was a speech by Trump at the World Economic Forum in Davos, Switzerland, followed by fourth quarter U.S. GDP numbers due at 1330 GMT that should show the world's largest economy in robust health. The ICE US dollar index fell almost 10 percent in 2017 and is down 3 percent so far this year.

The early price action suggests gold should be able to maintain its upside bias as long as it can hold above $1344.90.

SHORT TERM TRADER: Took profits this morning at 1.2475 and will re-buy depending on this week's and this month's close. In mid-2015, a dollar was worth 125 Japanese yen; that fell to 109 yen Thursday. But some reckon other drives may be spurring the rally.

Experts note that countries like China have higher barriers to trade than the U.S. Even the European Union has been accused of pursuing protectionist trade policies to defend its own interests, particularly in agriculture and in industry. Last April, Trump said he was worried the dollar was "getting too strong". Stronger-than-expected results would help the dollar to erase part of its recent dips.

During his visit to Israel this week, Pence told Israeli lawmakers that the U.S. was fast-tracking the embassy plans, aiming to move it from Tel Aviv to Jerusalem by the end of 2019.

With European Central Bank (ECB) president Mario Draghi declining to lean against the recent euro rally and instead signaling that economic data pointed to "solid and broad" growth, investors were encouraged to push the currency higher.

As for concerns the site will make it too simple for couples to divorce, Wasser is skeptical. As Trump got off the helicopter in Davos, he gestured to aides who held him by the arms as he walked across the snowy landing zone to his waiting car.

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