Analysis of the American trading session

During the American session on Thursday, January 25, 2018, the US dollar has risen sharply against the major market currencies. The first half of trades the US currency was under pressure due to the resumption of a decline in the yield of the US government bonds. The single currency rose significantly against the US dollar at the beginning of the US trades, as evidenced by ECB President Mario Draghi’s comments. See “Details of Draghi’s Speech“.

In the second half of the trades, the US dollar is significantly outperforming the basket of currencies in response to comments of Donald Trump. On Thursday, Trump said that the rate of the US currency will grow and he wants to see a strong dollar.

The Canadian dollar also held a very volatile session. At the beginning of American trading, the Canadian strengthened its position against the US dollar, helped by data on retail sales in Canada. See “The Canadian Strengthens Positions: Retail Sales Data on Canada.“

Later, the Canadian dropped significantly against the US dollar, while losing on average of 70% of earned positions since January 24. Additional pressure on the Canadian was provided by a statement of the head of the Bank of Canada Stephen Poloz. On Thursday evening, Poloz said that even he does not know the future direction of raising of the interest rates, thereby confirming fears about NAFTA. Poloz noted that the Bank of Canada is also dependent on NAFTA and that it is impossible to calculate what measures will be required in case of termination or significant change in the treaty.

Alexander Sivtsov