Fed Delivers President Trump a Weaker Dollar

Fed Delivers President Trump a Weaker Dollar

$DIA, $SPY, $QQQ, $RUTX, $VXX

Wednesday, President Trump got one item on his wish list from the Fed’s meeting: a weaker Buck.

The Dollar Spot Index erased its Y 2019 gains Wednesday after the FOMC left rates unchanged, and lowered its forecasts to project no move through Y 2020.

Last week, Trump took to Twitter expressing his discontent about the USD’s strength and its effect on US manufacturing, putting the blame on Fed Chairman Powell. But, Wednesday, the Fed chief’s signaled that some policy makers would be willing to let inflation run above the central bank’s 2% target was enough to deflate the USD.

Chairman Powell notes a number of people wrote down overshoots of inflation under appropriate policy, a nod towards shifting towards an inflation make-up strategy, dollar-negative bias that the market clearly has.

The Greenback index sank 0.3% on the day, in its biggest decliner since October. The gauge is now down about 0.1% this year.

Treasury yields fell across the curve, with benchmark 10-year rates dropping roughly 5 bpts to 1.79%.

Wednesday, the major US stock market indexes finished at: DJIA +29.58 at 27911.21, NAS Comp +37.87 at 8654.06, S&P 500+9.11 at 3141.63

Volume: Trade on the NYSE came in at 752-M/shares exchanged

  • NAS Comp +30.4% YTD
  • S&P 500 +25.3% YTD
  • Russell 2000 +21.0% YTD
  • DJIA +19.7% YTD

HeffX-LTN’s overall technical outlook for the major US stock market indexes is Bullish to Very Bullish in here.

Looking ahead, investors will receive the Producer Price Index for November and the weekly Initial and Continuing Claims report on Thursday.

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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