US Dollar gains momentum amid trade policy uncertainty
The US dollar edged higher in early Thursday trading, building on the previous session’s gains and appearing to have regained momentum, reversing some of the losses incurred following the inauguration of the new US administration. Markets have been somewhat unsettled by contradictory statements from the administration. The initial omission of tariffs in the inaugural speech triggered a decline in the greenback, as tariffs are typically associated with higher inflation. However, subsequent remarks referencing levies on imports later that day prompted a partial recovery of earlier losses. Despite the current uncertainty and speculation surrounding the new administration’s trade policies, the fundamentals for the dollar remain positive. The US economy continues to display resilience, outpacing other developed nations. Against this backdrop, regardless of the eventual trade policy decisions in Washington, the US dollar is likely to remain supported against other major currencies, reflecting the relative strength of the American economy.
Ricardo Evangelista – Senior Analyst, ActivTrades
Source: ActivTrader
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