Donald Trump And Theresa May Dominate The News

John M. Bland, MBA

New USD Forex Policy? The other big currency overhang on the market is uncertainty over what the forex policy of the new Trump administration will be. Public communication about forex policy has to be conducted with much finesse, lest the markets misinterpret the message of the sender. Most recent U.S. governments have settled on having one well-briefed official spokesman on forex policy. This usually has been the Treasury Secretary. Even the President, typically has had little to say, if anything, on the topic. This week, U.S. Treasury Secretary-designate Mnuchin muddied the waters when he said that an excessively strong US dollar might be negative in the short term. The markets reacted to what sounded like a theoretical answer to a question, which proves my point. Mnuchin will have to learn to be careful when he comments on the dollar broadly. If he is referring to China or Mexico, that has to be made clear or traders might assume he is referring to the Euro or Japanese yen.

Key U.K. Brexit Ruling This week, the U.K. Supreme Court upheld a High Court ruling affirming that Parliamentary approval was needed for to invoke EU Article 50, which would Brexit into motion. However, the Court also ruled that approval of the "devolved" Parliaments, Scotland, Wales and Northern Ireland, would not required to take such an action. A bill invoking Article 50 was presented late in the week. There are no doubts that the bill will be approved, as no MP is going to try to thwart the clear the will of the people. The decision is not expected to impact PM May's end of March Brexit deadline. The GBP took the news in stride. If the approval of the "devolved" parliaments had been required, this could have become a messy process with Scotland already opposing Brexit.

On Friday, British PM became the first foreign head of state to meet with new President Trump. The two are thought to be like-minded in many ways. Trump has stated that he planned to put Britain at the "head of the queue" when it comes to trade negotiations after Brexit. The week-ahead calendar will be active. It features several central bank meetings. They include the Federal Reserve, Bank of Japan, Reserve Bank of Australia and Bank of England. Monthly PMI indices from around the world are also due, plus January U.S. employment data.

WEEKLY Forex Economic Calendar:

30 Jan Mon

00:00 CN- Lunar Year Holiday

13:30 US- PCE Deflator

15:00 US- Pending Homes Sales

31 Jan Tue

00:00 CN- Lunar Year Holiday

03:00 JP- Bank of Japan

07:00 DE- Retail Sales, Jobs

10:00 EZ- GDP

10:00 EZ flash CPI

15:00 US- Consumer Confidence

1 Feb Wed

00:00 CN- Lunar Year Holiday

All Day Manufacturing PMIs

13:15 US- ADP Jobs

15:30 US- EIA Crude

19:00 US- Federal Reserve

2 Feb Thu

00:00 CN- Lunar Year Holiday

12:00 GB- Bank of England

13:30 US- Weekly Jobless

13:30 US- Productivity

3 Feb Fri

All Day Service PMIs

04:30 AU- Reserve Bank of Australia

13:30 US- Employment

Be sure to refer daily Global-View to see the continuously UPDATED Economic Calendar and the Forex Forum for the complete list of key items (actual data, selected charts, etc.) as they are released.

John M. Bland co-founder

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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