The U.S. dollar came under heavy selling pressure this past week with the greenback breaking key support levels against the Japanese Yen, euro, British pound and other currencies. Although softer economic reports played a key role in the dollar’s decline, President Trump’s political trouble is the real reason for its aggressive slide as it could hinder his ability to push through pro growth policies.
However Trump could also “save” the dollar by going over Congress and pre-announcing policy plans – its unprecedented but so are many of this President’s actions and while he’ll still need to go through the proper channels, that could be enough to boost the dollar. Also the FOMC minutes are due for release next week and they could be hawkish – if they are, USD/JPY could return to 112. Technically however there is a lot of resistance above current levels with the 50-day hovering right above.
