Dollar Turns Subdued After Trump Declares National Emergency

After holding in positive territory during earlier part of the session on Friday, the U.S. dollar retreated and lost ground against some peers after President Donald Trump declared a national emergency on border security.

Earlier, Trump signed a bill to avoid another government shutdown.

Economic data turned out to be a mixed bag. Import prices contracted in January and industrial production declined in the month. However, there was something to cheer about for investors as data from the University of Michigan showed consumer sentiment to have climbed to a score of 95.5 in February, topping forecasts.

The dollar index dropped to a low of 96.83 by mid afternoon, after having risen to a high of 97.37 early on in the session.

On the trade talks front, the two-day high level discussions ended in Beijing today with no progress on certain key issues. Chinese President Xi Jinping said after the conclusion of the two-day discussions that talks will resume in Washington next week.

The dollar strenthened to 1.1234 against the Euro, gaining significantly from previous close of 1.1298, but retreated later and weakened to 1.1312.

Comments from European Central Bank that banks may get some long-term refinancing sent stock prices, especially those from the banking space, soaring in European markets.

The greenback exhibited weakness against the Pound Sterling, with the latter rising to $1.2897, up from previous close of $1.2802.

Against the Yen, the dollar strengthened to 110.65 yen from previous close of 110.47, but eased to 110.41 subsequently, netting a loss of about 0.05%.

Against Swiss currency, the dollar reached a high of CHF 1.0090, but eased to CHF 1.0045 later on in the session, losing about 0.05%.

President Donald Trump today declared the situation on the U.S. border with Mexico a national emergency in order to secure additional funding for his divisive border wall.

Trump announced the controversial move in a speech from the White House Rose Garden after both the House and Senate approved legislation to avoid another government shutdown.

The spending bill provides significant money for border security, including nearly $1.4 billion for physical barriers, but falls well short of the $5.7 billion Trump has demanded for construction of the wall.

During his speech, Trump reiterated the justifications for the border wall that he offered throughout his presidential campaign and his two years in the White House.

The material has been provided by InstaForex Company – www.instaforex.com

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