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According to the AXIOS website on January 16, US President Biden slammed President-elect Trump in his farewell speech on Wednesday and reviewed the "political legacy" he left in the Oval Office. Biden promised a peaceful transfer of power and wished the new government success, but he targeted Trump in his speech, saying: "We need to amend the Constitution to make it clear that no president is immune from the crimes he or she committed during his or her tenure." He also said: "Today, an oligarchy is forming in the United States, which has extreme wealth, power and influence, which actually threatens our entire democracy, our basic rights and freedoms." He added that the tax law must be reformed, "not to give billionaires the biggest tax cuts, but to make them start paying a fair share."January 16, Capital Economics economist Abhijit Surya said that the resilience of Australias job market means that the Reserve Bank of Australia is unlikely to rush to relax policy settings. He added that the unemployment rate actually fell from 4.1% in the third quarter to 4.0% in the fourth quarter, significantly lower than the central banks expectations of 4.3%. He said that the Reserve Bank of Australia may not start cutting interest rates before May, although the market believes that a rate cut in February is very likely, and a lot still depends on the fourth quarter CPI data to be released at the end of this month.On January 16, according to the Washington Post, U.S. House Speaker Johnson confirmed on Wednesday that he had decided to remove Representative Michael Turner from his position as Chairman of the House Permanent Select Committee on Intelligence. The leadership change of this closely watched and powerful committee indicates that the party may change its attitude towards the Russia-Ukraine issue in Trumps second term and when the Republicans have a majority in both the Senate and the House. Turner is an advocate of providing funds for Ukraine and he has sometimes been criticized by Ukrainian-skeptic Republicans in the House. Turner allegedly told the media that the House Speaker cited "concerns from Mar-a-Lago" as the reason for his removal. Mar-a-Lago is Trumps residence in Florida.Hong Kong stocks rose, with the Hang Seng Index up 1% and the Hang Seng Tech Index up 1.7%.October Rice Field (09676.HK) rose nearly 15%, and it is expected that its adjusted net profit in 2024 will increase by no less than 110% year-on-year.

With an eye on ECB policies, the US Dollar Index defends its recovery from a two-week low of 107.00

Daniel Rogers

Jul 21, 2022 11:40

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After recovering from a two-week low the previous day, the US Dollar Index (DXY) hovers at 107.05. In doing so, the dollar index reflects market trepidation before to a major monetary policy meeting of the European Central Bank (ECB). The day before yesterday, the DXY had its first daily rise in four days.

 

Market concerns about a European recession and strong inflation data from the UK and Canada may be to blame for the DXY's increase. The demand for safe haven assets such as the US dollar increased as a result of Sino-American tensions and China's covid problems.

 

Vladimir Putin, the president of Russia, reportedly said that it is unclear in what shape the Nord Stream 1 machinery would be returned after maintenance. According to Reuters, Ursula von der Leyen, president of the European Commission, said on Wednesday that a total suspension of Russian gas was a viable possibility. It should be highlighted that concerns over gas prices may have caused the International Monetary Fund (IMF) to decrease its growth forecasts for Germany. Because of this, the IMF projected Germany's growth to be 1.2 percent in 2002 and 0.8 percent in 2023. In a previous forecast, the IMF predicted that the German economy would grow by 2% per year. Along with the IMF, the Asian Development Bank (ADB) has lowered its forecast for growth in developing Asia from 5.2 percent to 4.6 percent for 2022.

 

Political worries in Italy also foreshadowed further misery for the EU and the markets. Consequently, Prime Minister Mario Draghi received a vote of confidence; but, because the vote was boycotted by the three major cotillion parties, Mr. Draghi may resign and call for early elections.

 

Wall Street ended the day with smaller gains in line with the mood, as the US 10-year Treasury yield halted rising after a two-day rise at about 3.03 percent. As a result, as of the time of publication, intraday S&P 500 Futures were down 0.25 percent at 3,952.

 

Moving forward, DXY traders can find some fun in the US Weekly Jobless Claims and July Philadelphia Fed Manufacturing Survey. However, as markets expect a greater rate hike than the 0.25 percent increase proposed the day before, the ECB's decision will draw a lot of attention. Therefore, in order to prevent the US currency from continuing its current recovery, ECB officials must not only announce the 25 basis point rate increase but also take further steps to win back the confidence of Euro bulls.


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