USD/JPY has recorded losses in the Tuesday session, erasing the gains from Monday. Currently, USD/JPY is trading at 112.20. On the economic front, Japanese numbers were mixed. Preliminary Industrial Production declined 0.8%, well off the estimate of +0.4%. This was the first decline in 8 months. Retail Sales improved to 1.0%, edging past the forecast of 0.9%. In the US, Preliminary GDP is expected at 2.1%. As well, CB Consumer Confidence is forecast to dip to 111.3 points. As well, President Donald Trump will address a joint session of Congress.
President Trump will deliver his first major speech on Tuesday, as he delivers remarks to a joint session of Congress. Although it is not officially a State of the Union address, the speech could have huge ramifications for the financial markets. Since Trump’s election win, the stock markets are sharply higher and the US dollar has improved, but the greenback has lost ground since Trump has become president. It’s crunch time, as the markets want to hear some details about Trump’s economic agenda. Trump recently promised to unveil a "phenomenal" tax reform package and significant spending on infrastructure, but hasn’t provided any details. Tuesday’s speech marks a critical opportunity for the new administration, which is still trying to find its bearings after a rocky first month. If Trump fails to present specifics in terms of numbers or at least some timelines, market sentiment will likely sour, dragging down the US dollar.
