The US Dollar Reacts to Trump’s Treasury Secretary Nomination
The US Dollar (USD) saw a slight decline of nearly 1% as the week kicked off, following President-elect Donald Trump’s confirmation of Scott Bessent as the nominee for Treasury Secretary in his upcoming cabinet. Bessent, known as a fiscal hawk, aims to reduce the budget deficit to 3% of GDP by 2028 and supports tariff and tax cut plans. This nomination has been viewed positively by investors, easing concerns about the impact of Trump’s fiscal policies.
US Economic Calendar for the Week
- Thursday’s public holiday for Thanksgiving has led to a shift in US economic data releases to Wednesday.
- Key data points for the week include Personal Consumption Expenditures (PCE) for October, the second estimate of third-quarter US Gross Domestic Product (GDP), and weekly jobless claims.
- Monday started off with the Chicago Fed National Activity Index for October and the Dallas Fed Manufacturing Business Index for November.
Daily Market Movers
- The Chicago Fed National Activity Index for October came in at -0.4, slightly lower than the previous month.
- The Dallas Fed Manufacturing Business Index for November improved to -2.7 from the October reading of -3.
- Global equities are on the rise, with Japanese indices closing higher by around 1% and European and US futures showing positive gains of about 0.50%.
- The CME FedWatch Tool predicts a 56.1% chance of a 25 basis points rate cut by the Fed at the December 18 meeting.
- The US 10-year benchmark rate is at 4.29%, moving away from the recent high of 4.50%.
US Dollar Index Technical Analysis
The US Dollar Index (DXY) experienced a slight decline following Trump’s Treasury Secretary nomination but quickly recovered. Key levels to watch include 107.35 and 108.00 on the upside, while 106.52 and 105.53 provide support. The DXY’s recent high at 108.07 is a crucial level to surpass for further upside potential.
GDP FAQs
Gross Domestic Product (GDP) measures a country’s economic growth over a specific period. A higher GDP result is positive for a nation’s currency as it reflects a growing economy that attracts foreign investment. When an economy grows, people tend to spend more, leading to inflation. Central banks may raise interest rates to combat inflation, affecting currency values.