U.S. dollar jumps amid Trump’s tariff announcement

Analysts are divided on the timeline for ending stimulus.


The U.S. dollar index rose against most other currencies in late trading on Thursday, as investors were awaiting for more details about U.S. President Donald Trump’s tariff plan.

Also the central bankers did not changed the plan for quantitative easing.

The bank revised the forecast for eurozone 2018 growth upwards to 2.4 per cent, compared with the 2.3 per cent estimated in December.

The ECB still expects inflation of 1.4 per cent this year, but reduced the outlook for consumer-price growth in 2019 from 1.5 per cent to 1.4 per cent.

He added: “This approach is consistent with above trend economic growth, a continued reduction in the output gap and gradual upward pressure on inflation towards target”.

“Our mandate is in terms of price stability”.

Dropping its ECB’s so-called easing bias was largely symbolic as few if any expected bigger bond buying. Draghi said the move was “backward-looking” because the line on possible increases had first been introduced in 2016 when the deflation threat was real. That is seen as a precursor to a broader policy revision later this year to rein in its extraordinary stimulus measures.

“So we are asking the ECJ for a clarification of the present situation”, Draghi said.

With the central bank as conservative as the ECB, that is judging not twice but, ten times before it changes a single word in its statement is such change radical, regardless of what Draghi says in the press conference.

In New Zealand, traders will be watching today for electronic card spending for February, expected to show growth slowed to 0.1 percent from 1.4 percent in the previous month.

They erased most losses as White House spokeswoman Sarah Sanders told a media briefing that the impending hefty US tariffs on steel and aluminum imports could exclude Canada, Mexico and a clutch of other countries. Trump has long singled out China for being unfair in trade practices, but experts say the tariffs would hurt US allies Canada and the European Union far more.

European Financial Affairs Commissioner Pierre Moscovici said Europe was preparing immediate counter-measures just in case of a major trade skirmish.

Both China and the European Union have threatened to retaliate with tariffs of their own, however, a prospect that bodes extremely poorly for riskier, commodity focused economies like South Africa’s. “Inflation is falling back, with headline CPI at a one year low, the euro is rising and some of the recent data has been slightly softer of late, and that’s before we even start to look at the current backdrop of Italian politics”, added Hewson. Currently, the central bank of the region intends to buy bonds worth 2.5 trillion Euro by September this year.


European Central Bank chose to keep its benchmark interest rate unchanged at 0.00 percent, holding its deposit facility rate at its current level of -0.4 percent and its marginal lending rate at 0.25 percent. Asset buys are set to continue at 30 billion euros per month.

European Central Bank to hold policy steady amid weak inflation