Donald Trump sent another Tweet yesterday that urged the Federal Reserve to resist hiking interest rates this time around. The former reality television star appears to be unhappy with the central bank’s ‘quantitative tightening’ programme, which is currently taking $50 billion from the US economy every month in a bid to unwind its stimulus.
As it stands, it is extremely unlikely that the Fed will listen to Trump, which is just as well given that central banks are supposed to operate outside of politics. We will find out after 7pm tonight, when the decision is announced. It will be interesting to see what is said about fiscal policy in 2019 and if there is a suggestion that policy makers will be less hawkish throughout next year, we could well see the dollar weaken.
Yesterday, we saw housing starts for November, which showed construction of new homes jumped by 3.2% to an annual rate of 1.256 million. It is the highest figure for seven months and well above expectations of a 0.2% drop. Building permits also came in well above expectations at 5% compared with a prediction of a 0.4% fall.
For more on currencies and currency risk management strategies, please get in touch with your Smart Currency Business trader on 020 7898 0500 or your Private Client trader on 020 7898 0541.
