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@Forex - Dollar up in Asia as market shrugs of Japan GDP, Russia probe(18/05/2560)

18 May 2017
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Investing.com - The dollar posted early gains in Asia on Thursday even as Japan reported better than expected GDP for the first quarter and the U.S. Justice Department Deputy Attorney General Rod Rosenstein appointed former FBI director Robert Mueller as special counsel to take over the investigation of Russia's alleged interference in the U.S. presidential election. The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.06% to 97.40. USD/JPY changed hands at 111.16, up 0.30%, while AUD/USD traded at 0.7433, up 0.04%. Japan reported gross domestic product data for the first quarter rose a batter than expected 0.5%, compared with a provisional 0.4% gain seen quarter-on-quarter and at a 2.2% annual pace, beating the 1.7% increase seen year-on-year. Ahead, Australia reports jobs data with an expected 5,000 jobs added in April for a steady unemployment rate of 5.9% and a participation rate of 64.7%. Later, China will report house prices data for April. Nomura in a note to clients on Thursday said the Trump investigation has heightened market risk. "Renewed uncertainty about US politics is weakening risk sentiment. In the FX market, JPY has outperformed today, showing a typical reaction to the higher uncertainty," Nomura said. "Impeachment of President Trump is unlikely, and this may not be a game-changer for the FX market. Various risk proxies, implied volatility in FX, rates and equity markets are still at relatively healthy levels, as European political uncertainty has subsided. Nonetheless, increasing doubts over President Trump’s ability to proceed with his economic policies will likely hurt USD momentum for the time being, even though expectations for bold US economic policy had already declined before this." Overnight, the dollar fell against a basket of major currencies on Wednesday, as political turmoil in Washington intensified, after a report that President Donald Trump attempted to influence an ongoing FBI investigation weighed on sentiment. The New York Times reported late Tuesday, that Trump asked the then-FBI Director James Comey to shut down an investigation into the actions of former National Security Advisor Mike Flynn. Although, The White House on Tuesday denied the report, and said that the president has “never” asked Comey to end any investigations, investors fled risk assets and poured into safe-havens amid the continued political saga in Washington. The allegations that Trump tried to interfere with an ongoing FBI investigation, came a day after reports that Trump had shared sensitive information with Russia at a meeting last week. The U.S. dollar lost ground against its yen counterpart, as investors flocked into safe-havens, which includes the yen. Source: investing.com (17/05/2017)

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