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Trade war fears ease as Kudlow replaces Cohn Whilst the S&P and Nasdaq struggled overnight, the Dow Jones managed to snap its 3-day losing streak, as trade war fears eased, on the appointment of Larry Kudlow as Trump’s economic advisor. The markets are rather relieved by Trump’s choice, as reflected by industrials moving higher early on. Kudlow is known as an advocate of free trade, so given the protectionist policy concerns and trade war fears circulating, the fact that Trump is even willing to have Kudlow on his team, is an encouraging sign.
Trading has been extremely choppy over the last week as investors have focused almost
Eurozone Inflation under the spotlight
Dovish Draghi was responsible for pulling the EUR/USD lower earlier in the week, as his concerns over a strong euro and sluggish eurozone inflation weighed on sentiment for the common currency. The dollar then cheered the appointment of Larry Kudlow a vocal supporter of a stronger dollar which boosted the greenback pulling EUR/USD even lower on Thursday.
Today attention will flip back to
These forecasts highlight the problem of stubbornly low inflation encountered by the European Central Bank, which remains well under the ECB’s target 2%. Whilst eurozone growth was the big story for 2017, in 2018 economic data is pointing to a loss of momentum. The
EUR/USD steady at $1.30 support
EUR/USD has fallen 0.7% over the past two sessions but has once again found support at $1.23. Softer than forecast CPI data could see EUR/USD continue its declines to the next level of resistance at $1.2265, before extending to $1.22. A surprise to the upside in the CPI print could see EUR/USD push back towards support at $1.2335, opening the door to $1.2380 on the way to and beyond $1.24.