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Forex - Dollar stronger against currency basket, Fed eyed for next week

Investing.com -

Investing.com - The dollar rose against a basket of currencies on Friday as the new U.S. administration keeps up a busy pace of meetings and actions with a Fed meeting next week expected to add more for investors to chew on.

USD/JPY changed hands at 1135.09, up 0.47%, while GBP/USD fell 0.45% to 1.2542 as British Prime Minister Theresa May met President Donald Trump at the White House with both pledging to expand trade ties, but also seeing some friction on talk over economic sanctions on Russia.

Trump is expected to speak on Saturday with Russian President Vladimir Putin for the first time since taking power a week ago and was asked if he would lift sanctions imposed on Russia by then-President Barack Obama over Moscow's annexation of Ukraine's Crimea Peninsula in 2014. Trump declined to be drawn in, saying it was too early to tell, but May was emphatic that any such action needed to be coordinated with European allies who also imposed sanctions.

The U.S. dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, rose 0.05% to 100.57.

The Fed releases its latest review of policy on Wednesday with the Fed Rate Monitor Tool from Investing.com showing a nearly 95% think the central bank will hold pat.

Investors took note of U.S. Bureau of Economic Analysis figures that said gross domestic product grew 1.9% in the fourth quarter of 2016, disappointing expectations for 2.2% and after a 3.5% growth rate in the three months to September. Separately, the Census Bureau said U.S. durable goods orders fell 0.4% in December, compared to expectations for a 2.6% gain. Core durable goods orders, which exclude transportation items increased by 0.5% last month, in line with expectations.

Sentiment on the greenback improved after Trump suggested the implementation of a 20% tax on Mexican goods to pay for a border wall, sparking concerns of a possible trade war between Mexico and the U.S. as Trump said a meeting to discuss a border wall and trade ties with counterpart President Enrique Peña Nieto would not happen as planned.

USD/MXN ended the week down 1.59% to 20.8721.

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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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