US Dollar Leads in Markets After Treasury Boss’ Provocative Comments

The US dollar was on the rise as trading began for the week this morning.

The dollar index, a tool used to work out how the currency is performing compared to six other international currencies, rose slightly by 0.1% to the 95.31 level.

The development came after the US Treasury Secretary, Steven Mnuchin, announced over the weekend that the American government is looking to introduce clauses in future trade deals designed to put trading partners off meddling in their country’s currencies.

This reflects what has happened with the recent cross-border deal to change the North American Free Trade Agreement.

In Japan, where the government has in the past brought in forex market manipulations, there was discussion in the media over whether or not this could adversely affect Tokyo’s ability to do this in the future.

However, it did not appear to affect the JPY/USD pair, which has been performing well in recent weeks. Today, it rose to 111.94.

Looking to the week ahead, there’s plenty scheduled to keep forex traders busy.

On Monday, at lunchtime, we will see retail sales data for September out of the US. Overall figures are expected to show a significant month on month rise from 0.1% to 0.5%.

A couple of hours later at 2.30pm GMT, the Bank of Canada will release its Business Outlook Survey, compiled by speaking to a hundred different Canadian business executives.

Into Tuesday, Italy will release its industrial sales and order figures for July at 8.30am GMT. Half an hour later it will also release its consumer price index figures for September.

Given the ongoing rows over the country’s budget deficit target, it’s likely that this particular economic release will be closely watched.

Employment figures in the UK are due Tuesday as well. Average earnings for August are expected at 8.30am GMT, as is the overall unemployment rate for August, which is expected to hold firm at 4%.

At 2pm GMT, the National Association of Home Builders in the US will publish its housing market index for October. This is expected by analysts to also remain static at 67.

The main event of the week, however, will be the Brexit summit in Europe which takes place on Wednesday.

British Prime Minister Theresa May will meet with her counterparts in Europe as well as senior figures from the EU to discuss a possible agreement on the terms of the UK’s withdrawal.

However, she is expected to face rebellions of unknown size from backbenchers in her Conservative Party, and the issue of the border between the Republic of Ireland and Northern Ireland is also a salient issue given that she is supported in office by the Northern Irish DUP.

Both the pound and the euro may be affected.

Separately, both Britain and Europe’s core consumer price index figures for September are out on the same day. In Britain, the year on year change is expected to move from 2.1% down to 1.8%, but in Europe, a small rise from 0.9% to 1% is expected.