IMF's Furusawa warns of risk to U.S. growth outlook due to uncertain policy

Making a scheduled speech at an event in Tokyo, IMF’s deputy managing director Mitsuhiro Furusawa on Thursday warned of risks to U.S. growth outlook  on account of uncertainty over the new administration's policies. Furusawa added that uncertainties could contribute to financial volatility in coming months.

Furusawa said that Asia continues to perform strongly and the near-term outlook remains strong. However, rising protectionism in advanced economies could affect Asia's prosperity, adding to downside risks, he warned.

"Uncertainties could contribute to financial volatility in the coming months," Furusawa said, calling for flexible exchange rates, use of macro-prudential policies and stronger reserves buffers to cope with capital flow volatility.

U.S. Dollar index declined sharply on the day after showing a mild jump above 100 level. At the time of writing, it was trading around 99.46. The index has broken the double bottom at 99.40 and any break below confirms major weakness. Any break below 99.40 will drag the index down till 98.85 (61.8% retracement of 103.82 and 95.89)/98.54. On the flipside, any break above 99.89 (100- day EMA) will take the index till 100.18 (5- day MA)/100.60 (trend line joining 103.82 and 102.95). Short term bullish invalidation only below 98.

FxWirePro's Hourly USD Strength Index at 1150 GMT remained bearish at -84.557 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex.