Dollar slides as Trump says currency is ‘getting too strong’

The dollar slumped broadly on Thursday, falling to some five-month low against the yen, after U. S. President Donald Trump helped accelerate its recent decline by saying the currency was too strong.

Dollar slides as Trump says currency is 'getting too strong'

The greenback took an important hit after Trump told the Wall Street Journal the dollar is getting too strong which he would like the Federal Reserve to stay rates of interest low.

The comments were a brand new reminder from the president’s protectionist trade rhetoric, which has long been supply of concern for dollar bulls.

Trump’s comments came at any given time when some had begun to believe that perhaps the president wasn‘t as supportive of the weak dollar as initially perceived, said Shin Kadota, senior strategist at Barclays (LON : BARC ) in Tokyo.

But he reiterated his view that a robust currency hurts U. S. competitiveness, adding fresh downward pressure upon the dollar.

The U. S. currency was 0. 3 percent lower at 108. 805 yen after stooping to some five-month low of 108. 730. Inside a bearish technical signal, the pair broke below its 200-day moving average of 108. 75.

The dollar has shed 2 percent against the yen thus far soon, using the safe-haven Japanese currency already on the bullish footing due to a rise in geopolitical tensions.

There will be fresh concerns in regards to the French presidential election and possible U. S. military action against Syria and North Korea. With investors viewing South Korea’s sovereign notes like a riskier bet upon the rising tensions, the premium to the country’s credit default swap debt insurance has risen to some nine-month high.

That Trump seemed unmoved from the significant weakening from the dollar against the yen already set up increased nervousness toward the U. S. Treasury’s semi-annual currency report due Friday, and next week’s U. S. -Japan bilateral dialogue.

It appears the Trump administration is attempting to make up to its internal policy shortcomings having a show of force in external policy, leading to some confrontational stance with trade partners, said Daisuke Karakama, market economist at Mizuho Bank.

Currencies rates and trade balance inevitably become themes to confront others countries with. So if you feel inside the forex market it requires lots of courage to purchase the dollar at this time.

The euro rose 0. 1 percent to $1. 0669, not far given by a six-day high of $1. 0675 reached overnight.

The dollar lost significant ground against the pound and Swiss franc also, and thus the dollar index versus a basket of major currencies lost about 0. 7 percent to some two-week low of 100. 040 (DXY ).

The Australian dollar was given some breathing room like the greenback slumped. Stronger-than-expected domestic employment data also lifted the currency.

It was eventually up 0. 5 percent at $0. 7567, pulling far from a three-month low of $0. 7473 plumbed the previous day when wide-spread risk aversion amid simmering geopolitical concerns took its toll upon the Aussie.

The dollar was on track to its third straight day‘s losses against China’s yuan, after rising to some one-month high in the beginning each week.

The yield upon the benchmark U. S. 10-year Treasury note (US10YT=RR ) was at 2. 234 percent after touching 2. 221 percent, its lowest in nearly five months.

Leave a Reply

Your email address will not be published. Required fields are marked *