Financial markets were on standby during early trading on Tuesday with most investors treading cautiously ahead of U.S President Donald Trump’s speech to Congress this evening. Although global stocks have displayed phenomenal gains this month, the growing scepticism over the sustainability of the bull rally may encourage participants to heavily scrutinize Trump’s first speech to a joint session of Congress. With the visible lack of clarity over the proposed pro-growth policies attributing to the market anxiety, investors will be paying extra attention to topics on tax cuts, infrastructure investments, trade, and deregulations.
Although some participants remain cautiously optimistic over Trump providing further insights into his economic policies, the threat of today’s speech mirroring the inaugural address could trigger a tidal wave of risk aversion. Global markets have been somewhat patient and even resilient against the persistent Trump uncertainties, but the crack could start to show if nothing new is brought to the table.
Dollar Index hovers above 101.00
The greenback drifted lower during Tuesday’s trading session as investors awaited Trump’s market shaking stimulus plans. Although sentiment towards the United States is firmly bullish and domestic data continues to display signs of economic stability, the dollar remains pressured. Sellers have exploited the ongoing anxiety to limit gains on the greenback while the uncertainty over a March rate hike despite the rising odds have installed bears with further inspiration to attack prices. Although Trump remains the main focus for today, investors may direct some attention to the revised US GDP report for the fourth quarter. While a positive release may slightly uplift the dollar, gains could be swiftly surrendered if Trump fails to deliver in his speech to Congress this evening.
Commodity spotlight – Gold
The growing uncertainty across the board and rising political risks have bolstered the appetite for safe-haven assets with gold back in fashion. This yellow metal remains bullish on the daily charts with further upside expected in the short term if the greenback continues to depreciate. With investors maintaining a cautious approach ahead of Trump’s speech to Congress this evening, bulls may take advantage of the anxiety to elevate gold prices higher back above $1260. From a technical standpoint, the $1250 intraday level could act as a minor support which encourages a further incline higher towards $1265.
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