U.S Dollar slides as market anxieties mount over Trump

The U.S Dollar experienced its worst January in 30 years, as markets continue to react to President Trump’s protectionist agenda.

The U.S Dollar fell 2.6 percent against other strong currencies, marking its worst start since 1987. However, the dollar rebounded on Wednesday by 0.1 percent, upon anticipation of the U.S Federal Reserve Meeting. Markets expect the Fed to keep Interest Rates unchanged, as it waits for further clarification on the 45th President’s fiscal agenda.

This follows comments by Mr Trump’s trade adviser to the Financial Times, which accused Germany of exploiting a “grossly undervalued” Euro currency as an “implicit Deutsche mark”.

President Trump has been openly critical of other nations such as China, for alleged currency manipulation. Most recently at a press conference he commented:

“They play the money market, they play the devaluation market, while we sit here like a bunch of dummies.”

Currency markets remain turbulent over speculation that Mr Trump is set to abandon the U.S “strong dollar” policy, which has been championed as far back as President Clinton’s tenure.

In addition, markets remain anxious over Donald Trump’s policy agenda, which so far has exhibited a strong protectionist slant. President Trump implemented a controversial executive order banning the travel of Muslims from 7 Muslim-majority countries, and most recently rustled diplomatic relations with the Australian leader Malcom Turnbull over a previously agreed asylum deal between the two countries. According to the agreement, the U.S had agreed to resettle up to 1,520 asylum seekers from offshore detention centres in Nauru and Papua New Guinea.

Mr Trump has remained active on his Twitter account, tweeting his dismay over the refugee deal agreed upon by his predecessor, Barack Obama.

Initially, following Trump’s election in November, the U.S dollar index rose 5.6 percent through December. 28, hitting a 14-year high, as markets anticipated boosts in spending and inflation under the businessman.

However, whilst it is only been less than two weeks since President Trump took office on January 20th, currency markets and the dollar remain turbulent on concerns of Trump’s controversial protectionist policies.

Read here about what can be expected from President Trump’s economic policies.

 

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