Mnuchin’s comment that “a weak dollar is good for the US†added fuel to the fire that was already burning: the fire-sale of the US dollar. In addition, with Trump’s “America First†agenda and the tough trade stance, a weaker dollar certainly seemed to be the clear interest of this administration. But saying it out loud and on the global stage at Davos by the Treasury Secretary and when the dollar is already falling is quite significant.
EUR/USD had a nice run since the dying days of 2017 but the pair was trying to maintain some stability ahead of the all-important ECB meeting tomorrow. We wrote that Draghi may try, and fail, to talk the euro down. Thanks to the Steven slide, his job became even harder. We can probably expect an even more dovish Draghi.
EUR/USD briefly touched on 1.24, reaching a high of 1.2401 before ticking down and trading just below this round number. We may see more rises despite the hesitance towards Draghi’s press conference.
Here is the weekly chart of EUR/USD showing the huge ascent:
GBP/USD is ignoring worries about Brexit and extending its own gains. The jobs report was OK and enough to send it above 1.42. The fresh rises send it to 1.4240.
Pound/dollar is now at the highest levels since before the EU referendum, when it traded around 1.46.
More: GBP/USD: Cable Rises Back Above The 1.4000-level; What’s next?
