January 11, 2017 – World stocks edged down from recent highs and the dollar steadied ahead of a news conference by U.S. President-elect Donald Trump in which he is expected to give more details about his plans for the U.S. economy.
While Trump’s election campaign calls for tax cuts and more infrastructure spending have boosted U.S. shares and the dollar, his protectionist statements and a flurry of off-the-cuff Tweets have kept many investors from adding to risky positions.
European shares fell 0.3 percent while the UK’s FTSE 100 was on track to snap an 11-day winning streak, with both indexes hurt by weakness in industrials. Stock futures on Wall Street eased 0.1 percent as the post-U.S. election rally shows signs of running out of steam.
Trump has vowed to label China a currency manipulator on his first day in office on Jan. 20 and has threatened to slap huge tariffs on imports from China.
U.S. House of Representatives Speaker Paul Ryan and top members of Trump’s transition team are discussing a controversial plan to tax imports.
Economists have warned that protectionist measures could stifle international trade and hurt global growth.
That brings Trump’s press conference, scheduled for 11:00am local time, into sharp focus.
“From a currency perspective, markets will aim to get a clearer picture on trade, fiscal stimulus and the new administration’s relationship to the Fed,” Morgan Stanley strategists wrote in a note to clients.
The dollar inched higher against the yen on Wednesday but was little changed against the basket of currencies used to measure its broader strength.
The dollar has gained broadly since Trump’s election in November as investors bet he would boost public spending and spur repatriation of overseas funds by U.S. companies as well as higher inflation and interest rates.
Sterling meanwhile edged towards a 10-week low against the dollar today, kept under pressure by fears that Britain will undergo a “hard” exit from the EU in which access to the single market will play second fiddle to immigration controls.