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Dollar steady as Trump press conference eyed

01/11/2017

The dollar was steady against a basket of the other major currencies on Wednesday as investors awaited a press conference by U.S. President-elect Donald Trump later in the day.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was little changed at 102.02.

The index has retreated since touching highs of 103.82 last week, the strongest level since 2002.

Investors remained cautious ahead of Trump's press conference as they awaited possible indications on the direction of his economic policies.

Trump will take office on January 20 and has yet to outline his policies in detail.

While Trump's election pledges for tax cuts and more infrastructure spending have boosted U.S. stocks and the dollar, his protectionist stance and the sudden episodes of market volatility triggered by his prolific tweeting have made many investors wary.

The euro was steady against the dollar, with EUR/USD trading at 1.0557 off Tuesday’s highs of 1.0626.

The dollar edged higher against the yen, with USD/JPY inching up 0.12% to 115.9, snapping two days of losses.

Sterling slid lower, with GBP/USD down 0.16% to 1.2156, re-approaching Tuesday’s two-month trough of 1.2106 as concerns over the prospect of a hard exit from the European Union kept up selling pressure on the currency.

The pound also edged lower against the euro, with EUR/GBP rising 0.17% to 0.8683.

In emerging markets, the Turkish lira fell to fresh record lows against the greenback while the Mexican peso was hovering close to all-time lows as political and economic woes continued to weigh on the currencies.

USD/TRY climbed 1.64% to trade at 3.8536 up from Tuesday’s close of 3.7915.

The selloff in the lira gathered pace after ratings agency Moody's said Monday that bank profits will be hit by an increase in bad loans this year and warned of a "general worsening" in the investment climate in Turkey.

USD/MXN was at 21.77 after hitting all-time highs of 21.62 on Tuesday amid fears over potential changes to U.S. trade policy under the incoming Trump administration.