Article Highlights

  • U.S. initial jobless claims at 234K vs. 249K forecast
  • U.S. final wholesale inventories up 1.0% as expected in Dec
  • U.S. equity indices close at record highs on Trump’s tax promise
  • Japanese PPI up 0.5% y/y vs. projected flat reading in Jan
Partner Center Find a Broker

The lack of top-tier data didn’t hold the U.S. dollar back from soaring up the charts, as it got a strong boost from Trump’s teaser on his  tax reform plan.

Major Events:

Trump talks tax reform – The Donald and his hair are back in the spotlight after the U.S. President declared that he is about to announce something that will be “phenomenal in terms of tax” in the next two to three weeks. He didn’t give any specifics just yet so market participants took a closer look at his recent remarks to figure out which sectors might benefit and what it could mean for the U.S. economy as a whole.

“Lowering the overall tax burden on American businesses is big league and that’s coming along very well,” Trump declared, sending stock indices rallying on expectations that corporate tax cuts can be implemented soon. The S&P 500 index closed at 2,307.87 (+0.58%), the Nasdaq ended at 5,715.18 (+0.58%), and the Dow was up 117.99 points to 20,172.33 (+0.59%).

According to White House spokesman Sean Spicer, the President acknowledged that middle-class Americans should benefit from tax relief and a reform plan that would keep jobs in the homeland and incentivize businesses to grow.

In addition, Trump talked about big changes in the aviation industry, citing that competitors of U.S. airlines are subsidized big league and that he doesn’t like aviation fees and taxes. This comes after his meeting with CEOs of U.S. carriers who are also hinting about industry changes that could bring more jobs and reduce regulation.

Major Market Movers:

USD – The Greenback chalked up gains big league, buoyed by expectations that Trump’s tax reform could support U.S. companies and overall growth.

EUR/USD dropped from 1.0691 to a low of 1.0650, GBP/USD retreated from 1.2560 to 1.2491, USD/JPY popped up from 112.25 to 113.35, and USD/CHF climbed from .9951 back above parity.

JPY In contrast, the Japanese yen gave up a lot of ground for the day as traders dumped the lower-yielding currency in favor of the dollar.

EUR/JPY advanced from 120.01 to 120.89, GBP/JPY is back up to 142.00, AUD/JPY rallied from 85.92 to 86.65, and CAD/JPY bounced off 85.50 to 86.45.

Watch Out For:

  • Tentative: Trump and Japanese PM Abe’s meeting
  • 12:30 am GMT: RBA official monetary policy statement (Read about their latest decision here!)
  • Tentative: Chinese trade balance (295B CNY expected, 275B CNY previous)
  • 4:30 am GMT: Japanese tertiary industry activity index (-0.1% expected, +0.2% previous)

See also:

London Session Recap

Asian Session Recap

Bonnie and Clyde, peanut butter and jelly, Kanye West and Kanye West. Some things just go well together.

In forex trading, you get better odds at securing pips when your fundamental analysis is complemented by technical analysis.

Head on to Big Pippin’s Daily Chart Art for some pip-locking technical setups!