November 16, 2024 (MLN): Following Donald Trump's election as the country's new leader, attention to the US economy appears to have somewhat slowed.
A major change like this might always compel monetary policymakers to reconsider and alter their policies to align with the new leadership's policy goals.
As a result, it's more likely that monetary policymakers' remarks and speeches will be more targeted towards a broader awareness of the economy.
Policies will undoubtedly change as a result of the likely shifts in the US administration, which will affect the US economy as a whole.
And this is a valid explanation for the slowdown in economic activity, which is why it will take some time for the market to stabilise. However, early in the upcoming year, Donald Trump will take office.
Additionally, this is a valid explanation for the pause in economic activity, which gives the market time to stabilise.
Watch out gold and the Dollar Index. Since Eurozone , UK and Japan are experiencing economic instability, investments have transferred to the USD, which is regarded as a safe haven asset and is rising versus the Euro, GBP, and JPY.
Europe, is experiencing hardship due to its deteriorating economy, because of the concern about Donald Trump's protectionist stance.
Pressure may mount on European trading partners to open their policies that could disrupt trade and its volume.
Meanwhile in UK, economic growth fell short of expectations even as inflation was reduced to 1.7% from the BOE's target of 2%. The US new administration's tariff strategy will likewise be a major concern for the British government.
In contrast, the latest data indicates that Japan's economy expanded more rapidly.
However, the market will remain focused on US economic developments, such as building permits and housing starts, MBA mortgage applications and current home sales.
In addition to the University of Michigan consumer mood report, the Philadelphia Fed manufacturing index is scheduled to be released on Thursday.
#GOLD @ $2561.50- The downward trend will continue as long as $ 2586-88 holds. If $ 2542-44 is broken, there is a chance that it may fall to test $ 2518-20 zone. Otherwise, $2596.
#EURO at 1.0541- It is well supported at 1.0470. Euro is anticipated to hold for a move towards 1.0640-50 levels. Break will push it to 1.0690. Or else watch 1.0390 on the downside.
#GBP at 1.2617- In order to restore its lost strength, the Pound Sterling must rise above 1.2750-80. The crucial support level is at 1.2530-40 which should hold. Otherwise, it might slide down to test the 1.2490-00 zones.
#JPY @ 154.34- Failure to defend the 152.70-80 levels would put pressure on USD. An upward test is still possible, but only if USD breaks 155.20 for 156.40.
The writer is the former Country Treasurer of Chase Manhattan Bank
Disclaimer: The views and analysis in this article are the opinions of the author and are for informational purposes only. It is not intended to be financial or investment advice and should not be the basis for making financial decisions.
Posted on: 2024-11-16T23:49:03+05:00
