US President Donald Trump caused the dollar to slide on Thursday, after saying the currency was “too strong” and that interest rates needed to stay low.
The dollar slid after the president’s comments, hitting month-long lows against a basket of other currencies. His words heightened investor anxiety over what his administration’s priorities are.
The US currency was trading down around 0.6 percent at UK market open, and is on track for its third day of losses against the Chinese Yen. However, it has since recovered some ground to trade up 0.88 percent against the pound and 0.3 percent against the euro (1236GMT).
Trump’s comments represent yet another shift in his stance, with IronFX analyst Sakis Paraskevov telling Reuters that “”Bearing in mind the administration’s continued verbal intervention in the FX market, we think that any near-term rallies in the dollar could stay relatively limited, despite the Fed raising rates at a moderate pace.”
Global markets also reacted to the news, with most trading down by UK lunchtime trading. The S&P 500 is currently down 0.38 percent, with the CAC40 down 0.55 percent and the FTSE 100 down 0.56 percent.
In the same interview with the Wall Street Journal, Trump said he would not label China a currency manipulator despite previous assertions to the contrary, adding that he wouldn’t rule out re-nominating Federal Reserve Chair Janet Yellen once her four-year term is up next year.