The US dollar is still by far the weakest currency in the G10, losing -0.5% against the EUR and -0.8% against the JPY. This is due to market reaction to the last interview given by Trump to newspaper Wall Street Journal. After the dollar the second most interesting currency is GBP, which before today’s speech of prime minister May works out some of the losses.
Trump in an interview for Wall Street Journal described the plan of border tax developed by the Republican Party as too complicated, also he pointed out that he is not a supporter of such a solution. In contrast, this is one of the key points of corporate tax planned by Republican Party, according to it, would be taxed imports and exempted from the tax would be export. Most experts indicated that Trump supports this solution, however, in the interview, he said simply that it is “entering a bad system, and the proposal is too complicated ‘. It was the fuse for the dollar sell-off, which took place in a period of lower liquidity during the Asian session. In general, recently we observed closing of long positions on dollar, which stems from disillusionment of markets by last conference of the President Elect.
The key event of the day will be speech of the British Prime Minister, Theresa May, at 12:45 (GMT+1) which is to present the position of London before the start of negotiations with European Union concerning conditions of “Brexit.” Reports from the weekend indicated that May is willing to sacrifice economic issues to regain full sovereignty in the field of migration control, which has been strongly negatively received by the markets. GBP yesterday was the weakest currency in the G10, now seeing some recovery. Perhaps we are seeing the classic behavior of prices in accordance with the maxim “buy the rumor, sell the facts’.
Zloty (PLN) strengthened mainly in relation to the weaker USD. USDPLN falls around 4.10, we now see the movement of -0.5%. Against EUR, CHF and GBP gold remains stable, the movements do not exceed 0.1%. The price is respectively 4.376, 4.977 and 4.081. For the Zloty will be important today’s conference of Prime Minister May, which could cause a wave of risk aversion and weaken the Zloty.
Adam Puchalski, analyst of financial markets XTB
