Today’s Key Market Drivers – 23rd October 2017

The US Dollar rallied strongly on Friday and gapped up at the market open this morning after the US Senate gave approval of a blueprint of Trump tax reforms which will not require the Democrats support. Traders who have been cautious about buying more US stocks and US Dollars after recent rallies have chosen to buy again with gusto as Trump’s tax cuts are overwhelmingly going to have a positive influence on US company profits and thus there is now an even larger demand for US Dollar assets. Add to this Trump is likely to choose a hawkish Fed Chairman to replace dovish Janet Yellen and we have the high likelihood of lower US taxes and higher US interest rates sooner rather than later, a recipe made in heaven for US Dollars asset to rise in value. The US stock market also jumped 165 points on Friday and closed at another record high. I have a stock I am looking to buy today.

In other currency news, Japanese PM Shinzo Abe looks like he’ll hang on to power after the weekend’s national election. For over 6 years now, the Japanese government and Bank of Japan have attempted to lift inflation by artificially printing money and buying Japanese assets and together with a 0% interest rate policy its put downward pressure on the Yen since 2011. I would anticipate the US Dollar v the Yen could rise back to June 2015 highs of 124.00 in the coming 6 to 12 months and I plan to hold a long USD v JPY position.

The Kiwi Dollar continued to remain under pressure on Friday as traders weigh up if the new Labour PM and the coalition government will be tougher on foreign investment and scrap the current loose immigration policy put in place by their predecessors. The US Dollars strong move on Friday has not helped the NZD v USD and if you would like to buy the NZD v USD I would call that catching a very sharp falling knife.

 

About the Author: Andrew Barnett

Andrew is a professional trader and successful investor who has a strong focus on education. He is a regular Sky News Money Channel Guest and one of Australia’s most awarded and respected financial experts, and is regularly contacted by the Australian Media for the latest on what is happening with the Australian Dollar. Director at LTG GoldRock, Andrew Barnett, guides thousands of traders around the world in the live market on a daily basis, advising them on buy and sell directions, as well as trading his own personal account. Andrew, a regular key-note speaker at trading and wealth-creation events throughout the Asia Pacific region, is an authorized representative registered with the Australian Securities and Investment Commission (ASIC).

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