The Asian stock markets reacted negatively to the political developments in the United States over the weekend, with both the Nikkei and ASX down more than 0.50 % on the day. Chinese and HK markets are closed for the Lunar New Year holiday.
In FX, the Dollar weakened against most other major currencies. EUR/USD opened with a 20 pips gap higher and rallied to 1.0740, while GBP/USD rose from 1.2540 to 1.26. Meanwhile, USD/JPY came under pressure and fell from 115.00 to 114.30. Support is seen at 114.10, followed by 113.05/10.
While the focus has been on politics in the past few days, the weak US GDP print certainly also has weighed on the US Dollar. The economy grew only 1.9 % quarter-on-quarter, while the market expected a 2.2 % increase. Given the crowded positioning, the Dollar could remain under pressure in the near-term.
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