Downward Dollar Makes Heyday for Traders
The U.S. dollar crumbled on Wednesday after Treasury Secretary Steve Mnuchin suggested that a weaker U.S. dollar would benefit the U.S. economy. In the aftermath of the comment, the U.S. dollar reached a three-year low against its major trading partners.
By Friday, both Mnuchin and President Trump stated that Mnuchin’s comments were misinterpreted, but currency investors were shaken by the comments and continued to sell the U.S. dollar.
For exporters of U.S. goods like manufacturers and farmers, a weaker dollar makes American products cheaper globally and increases demand. The weaker dollar also boosted gold, which reached a 17-month high on Thursday over $1,365 per ounce.
Meanwhile, consumers who depend on imported goods like coffee, electronics, or cars may find that their next purchase is more expensive as their dollars are less valuable on the global market.
Cattle Market Churns
Cattle prices exploded to a two-month high on Thursday morning as investors stampeded into the market. Cattle rose consistently for almost two weeks as buyers saw cheap values and grew worried that a winter storm in the Great Plains could restrict beef supplies.
However, herd mentality took over by midday Thursday when traders dumped cattle en masse, knocking prices swiftly lower, dropping the exchange-maximum three cents per pound.
The market was especially active Friday as ranchers, meatpackers, and traders positioned themselves ahead of the USDA’s monthly Cattle on Feed Report, which was released after the market closed. This means that prices could have a sharp move when trading resumes Monday.
Fresh Focus on Trade Boosts Stocks
On Friday, stock markets were boosted to all-time highs again as President Trump met with global elites in Davos, Switzerland. He defended his “America First” platform while remaining open to new trade agreements. He also encouraged the collection of global investors, finance ministers, and bankers “to do business in America,” a message that was well-received by stock markets.
Stocks found an additional boost Friday on a report that U.S. GDP grew more than expected, a further sign of strong economic growth in the United States. Dow Jones futures reached an all-time high on Friday over 26,400.