Forex News

Politics played a major role in the moves on the Forex market during the past week. That was beneficial for the US dollar, but not so much for other currencies, including the euro, the Great Britain pound, and the New Zealand dollar.

The US dollar jumped today, registering the biggest daily gain in a month, due to the hopes for the tax reform promised by US President Donald Trump.

The euro was mixed today, falling against the US dollar and the Great Britain pound, while rising versus the Japanese yen and the Swiss franc. The currency was supported by positive macroeconomic data and the outlook for an asset-purchase reduction, while dragged down by Europe’s political issues like the Brexit and separatism in Catalonia.

The British pound today rallied higher against the US dollar after a speech by British Prime Minister, Theresa May, where she called for collaboration between the EU and the UK on Brexit negotiations. PM May made her comments at an informal meeting with leaders of the European Council even as she remarked that the current Brexit talks had been challenging.

While the political turmoil in Spain took the spotlight in the news, other countries around the world were not immune to their share of problems in politics. South Africa was one of such countries, and that sent the South African Rand crashing down against the US dollar.

The Canadian dollar fell sharply today after the release of macroeconomic reports, which turned out to be worse than analysts had anticipated. The drop of crude oil prices were also unfavorable to the currency.

The Japanese yen rallied against such most-traded rivals as the US dollar and the Great Britain pound during the current trading session. At the same time, it was unable to gain on the European currencies like the euro and Swiss franc, which is surprising considering the political turmoil in Europe, specifically in Spain.

The New Zealand dollar tumbled almost 2% against its US peer and more than 2% against such currencies as the euro and the Japanese yen. The reason was the slump was the news that the leftist Labour Party joined with the populist right-wing New Zealand First party to form a coalition government.

The British pound fell against most of its peers for the second day in a row on Thursday, following the release of lower than expected retail sales data in the United Kingdom. The weak consumer demand continued a trend of disappointing economic releases over the past few days, as inflation rose while wage growth lagged behind.

The EUR/USD currency pair rallied to new highs today despite the announcement by the Spanish government that it would invoke Article 155 suspending Catalonia’s autonomy. The currency pair rallied higher in the early North American session ignoring the release of positive US unemployment data by the Department of Labor.