iFOREX Daily Analysis : January 13,2017

 | Jan 13, 2017 04:05AM ET

The dollar trimmed losses, but remained broadly under pressure against the other majors currencies on Thursday, despite the release of upbeat U.S. jobless claims data, as Donald Trump’s silence on future fiscal policies continued to weigh on the greenback.

The U.S. Department of Labor said initial jobless claims in the week ending January 7 increased by 10,000 to 247,000, from the previous week’s total of 237,000, while analysts had expected jobless claims to rise by 20,000 last week.

But the greenback remained under pressure after Donald Trump failed to offer details on his promises to boost fiscal spending and cut taxes, at a highly-anticipated news conference on Wednesday.

Elsewhere, the commodity-related loonie was boosted by rallying oil prices on Thursday, amid signs major oil producers are keeping their promise to cut production levels.

Today the U.S. is to round up the week with reports on retail sales, producer prices and a preliminary look at consumer sentiment, while Philadelphia Fed President Patrick Harker is to speak.

USD/TRY

The Turkish lira rebounded from record lows against the broadly weaker U.S. dollar on Thursday, a day after posting the largest one-day decline since a failed coup in 2016, which attempted to overthrow the government of President Recep Tayyip Erdogan.
Emerging markets have been hard hit since Donald Trump’s surprise U.S. presidential election victory in November, as the prospects of rising U.S. interest rates prompted investors to pull cash out of developing economies.

Turkey has become particularly fragile also because of high levels of political and economic risk and relatively low central bank reserves to defend its currency. A string of terror attacks in Turkey, uncertainty over the outlook for economic growth and worries about political instability have all pressured the lira lower.

The lira has already fallen around 7% against the dollar so far this year, in spite of efforts by the country’s central bank to shore up the currency on Tuesday. On Thursday, President Erdogan blamed a conspiracy for the recent plunge of the lira, saying those who used the exchange rate as a weapon were no different from terrorists.