MARKETS: Trump leaves dollar bulls unimpressed

 
We already knew that Trump wants to build a border wall with Mexico, bring back U.S. production onshore, and that he’s willing to be the best job creator America has ever known, but what are his plans on corporate tax reforms? How and when is he planning to spend on roads, bridges and other infrastructure projects? Is he going to impose tariffs on imports from China, Mexico and the rest of the world? Unfortunately, no updates were revealed.
Thus, the greenback was dragged, falling against all major currencies on Wednesday with the dollar index falling to 101.28, its lowest levels since December 14. The selloff continued until early Thursday suggesting that dollar bulls are no more willing to price any additional premium until we get more clarity on his promised fiscal plans.
The continued fall in U.S. treasury yields is another factor dragging the dollar. U.S. 10-year yields have been in a downtrend since December 14, losing 11.8% in value after spiking 42% since the election results were revealed.
U.S. stocks were less impacted, and managed to close higher despite the volatility and sharp selloff in pharma stocks which were attacked by Trump. Whether the rally can be sustained will depend on two factors, earnings growth and actions from Trump’s administration as his words and tweets are clearly starting to show less influence.
The combination of dollar weakness, lower U.S. yields and doubts in Trump's policies offered gold a boost, with the yellow metal posting a high of 1,199. So far, gold has recovered 6.8% from December lows, and traded higher in 11 out of 13 days. Federal Reserve Chair Janet Yellen’s speech will probably decide whether we’re going to see a break and hold above 1,200 on Thursday.

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