Weekly Forex Wrap up, April 10 – April 14, 2017
Hi everyone this is the weekly Forex wrap where I will go over the major highlights for the past week and talk about the impact this may have had on the Forex market. If you would like more free info on the Forex markets and what I do then please check me out on my website http://brandonturnerfx.com/
This week in the Forex markets had one clear theme, safe haven flows on geopolitical events.
Geopolitical: US President Donald Trump ordered the launching of 59 Tomahawk missiles from two US destroyer ships at Syria’s Shayrat airfield which was recently used to launch a gas attack on civilians by Bashar al-Assad’s regime.
The US also dropped the largest and most powerful bomb next to a nuclear warhead on and ISIS installation in Afghanistan. This type of weapon has never been used before and it was the Trump administrations first attempt on controlling the ISIS threat. Trump is getting really scary for how far he will take things right off the bat.
The Trump administration is examining its North Korea strategy including tougher economic sanctions which may include an oil embargo, airline ban, cargo interception and punishing Chinese banks that conduct trade with North Korea. Twitter reports stated that US officials believe North Korea has placed a nuclear device in a tunnel. This could mean a nuclear test is imminent, while other sources suggested a detonation could be Saturday morning and that North Korea’s Punggye-ri nuclear test site is primed and ready to go. Trump also stated that the US is sending an ‘armada’ to North Korea. That’s scary.
Further, China has amassed 150,000 troops on the North Korean border over fears that Trump may strike Kim Jong-un following the missile attack on Syria. This was later reported to be to a deal with possible North Korean refugees entering China but the market has rightfully taken this as a military action given how Trump has called for China to step up its effort to control the North Korean nuclear threat.
North Korea has also vowed to take the toughest counteraction against the US in response for deploying the USS Car Vinson aircraft carrier to the Korean Peninsula.
Trump and USD: The USD took a hit on the back of US President Trump stating that he favors a low interest rate policy and that the price of the USD is too strong. Forgive me for speaking out of turn but the Presidents job is not to control the price of the USD. There is this little institution called the US Federal Reserve that is tasked with controlling monetary policy which is supposed to legally be impartial to outside influences, including the President. And just to throw around his mightiness he has said that he will likely not offer Yellen, Federal Reserve Chair, a second term. This is because he will likely find a replacement that will agree to keep interest rates low rather than doing the right thing and normalizing monetary policy.
Safe Haven Flows: USDJPY is well below the 109.00 handle on the back of all the geopolitical issues written about above, political tensions between Russia and the US, and Trump talking down the USD. Gold is much higher as well.
AUD: Thursday, the Australian Employment Change came out awesome posting 60.9k jobs created versus the expected 20.3k and above the previous negative reading. Combine this positive news with the fact that Chinese Trade Balance data came in over 100% higher than the expected makes for one really strong AUD. NZD also moved higher in sympathy as the two currencies often move off one another.
USD: The USD lost plenty of ground this week on the back of Trump getting nutty with his thirst for war and now he thinks he also has the role of a central banks and is talking down the USD.
If I have used any abbreviations for certain economic data that you may need further clarification on try checking out my economic calendar. You can click on any news event and it will give you a full description of what it means and why it’s important. Doing this is a good self-study practice and will sharpen your skills and understanding of the Forex Market.
Happy trading next week and I hope you bank some good pips.