TSX weighed by industrials, financials; loonie gains after Trump’s greenback comments

USD/CAD is supported at 1.3000 levels and is trading at 1.3056 levels.

“Trump or no Trump, the US economy is on solid footing and that will continue to be supportive for the USA dollar and push treasury yields higher, said Nick Exarhos, senior economist at CIBC World Markets”. Still, the possibility that Trump will follow through on protectionist rhetoric has clouded the outlook for Canada’s economy, with almost half of economists polled recently paring back growth forecasts.

Sterling rose by about 3 per cent against the USA dollar, posting its biggest gain on record.

A stronger dollar has the potential to hurt USA companies that sell products overseas by making their goods more expensive, according to the Journal.

AUD/USD is supported around 0.7498 levels and now trading at 0.7560levels.

The Bloomberg Dollar Spot Index, which measures the greenback against 10 major peers, has fallen for the last three three weeks as traders questioned the sustainability of some of the most popular wagers on Wall Street since Trump’s election victory, including bullish dollar bets.

“We see the dollar overvalued against all the main currencies”, said asset manager Allianz (Swiss: ALV-EUR.SW – news) ‘s chief economist, Stefan Hofrichter. “Rising commodity price inflation should have also provided a boost to trade values by increasing export and import prices”.

European shares ended flat on Tuesday, coming off lows after British Prime Minister Theresa May provided some clarity on her country’s plans to leave the European Union. Brent crude, the global benchmark, rose 70 cents a barrel to $56.56.

Ahead of Trump’s January 20 inauguration, investors anxious whether he would follow through on pro-business pledges such as tax cuts, infrastructure spending and lighter regulation.

In New York, the Dow Jones industrial average lost 28.52 points at 19,857.21, while the S&P 500 index slipped 4.75 points to 2,269.89.

On top of this there is now more than enough doubt in the market over the longevity and effectiveness of US President-elect Donald Trump’s fiscal policies (run up the deficit, huge spending, slash taxes) that gold has posted a substantial rebound in around a fortnight or so of trading. The yield earlier fell to 2.305 percent, the lowest since November 30.

Spot gold prices are more than $13 an ounce higher, while spot silver is marching above the $17 mark.

Gold is leading the charge in precious metals this morning, as markets react to British Prime Minister Theresa May’s speech laying out plans for a “hard Brexit”, and President-elect Donald Trump smashes the United States dollar lower by saying that it is too strong.

“We see that $1,250 as not far away, but it is not going to rise above $1,300 as monetary policies are not going to be accommodative for gold prices to appreciate in a much bigger way”, Xu said. The February bullion contract jumped US$16.70 at US$1,212.90 an ounce.