GBPUSD moves above 1.2200. USDJPY at 114.00
The dollar is moving a touch lower as London traders look to exit for the day.
Fundamentally, the US trade data today was not supportive of growth. There has been lowering of GDP off the data. The Atlanta Fed GDPNow model came in at 1.3% today - much lower than the prior reading of 1.8%.
Part of the problem in the data is that imports increased to the highest level since December 2014, and the value of the dollar is restricting exports.
Oil imports were higher - partly reflective of higher prices for oil. Imports of cell phones and other household items increased by 1 Billion. Auto imports also hit a record high. China imports increased by 5.1%. Japan imports did tumble. Abe stays in Trumps good graces.
Although exports increased by 0.6% it did not keep track with the import gain. Exports to German fell 10.7% and shipments to China fell 13.4%. They will likely remain in Trumps dog house.
I spy a tweet from Trump soon on trade, and look for some others on dependence on foreign oil as well. Today Commerce Secretary Wilbur Ross has already been out saying the world is on notice that the US will not put up with manipulation/rule breaker. A more level playing field is eyed by the Trump administration.
What about the dollar?
Well the lower GDP for the 1Q should help slow the upside for the greenback. Yes we will get the hike in March but....1.x% is not 4% or 3% and the Fed should keep the talk tame
What might also help a lower dolllar? I spy more tweets on the strong dollar being a killer for US industry.
Trump wants to win on all fronts. If the dollar is a drag, he will look to stop it from being a drag. I wonder when Yellen will be dragged into the Oval office?
Meanwhile, the dollar is drifting lower. The GBPUSD is trading above the 1.2200 level and the USDJPY is testing the 114.00 level. The move above the 114.06 level has not been able to push materially above that key level (also the 100 hour MA comes in at 114.04).
For the GBPUSD, the price has moved above the 100 bar MA on the 5 minute chart. and is testing the 50% of the day's trading range. at 1.2210. A move above has the 200 bar MA not far away, and the price is still down on the day, but the technical picture is looking a little more supportive (weaker USD).
