World Economy

US Dollar Falls After Trump Speech

US Dollar Falls After Trump SpeechUS Dollar Falls After Trump Speech

The dollar fell to a 1-1/2 month low on Monday against an index of the world’s other top currencies, after US President Donald Trump struck a protectionist tone in his inauguration speech.

Trump’s “America first” message was followed over the weekend by coordinated protests in US cities, testy exchanges between members of his top staff and media and confirmation that key trade pacts were heading for the shredder, Reuters reported.

The dollar index, which measures the greenback against six major rivals, fell almost 0.5% to 100.28 led by a 1% drop to 113.51 yen and a 0.35% slide to $1.075 per euro.

“People had expected some kind of repeat of his (Trump’s) victory speech in November, but it was a bit confrontational and has sparked some concerns in the markets that he is going to play hard ball,” said Rabobank strategist Philip Marey.

“It was quite straight forward: buy American, hire American... so it’s clear what route he is taking.”

Trump confirmed that he would begin renegotiating the North American Free Trade Agreement and withdraw from the Trans-Pacific Partnership, the main economic pillar of the Obama administration’s “pivot” to the Asia-Pacific region in the face of a fast-rising China.

The dollar index rose around 4.2% between Trump’s election in November and the end of last year, but it has given back over 2.5% of that gain since then, having fallen for nine of the 16 trading sessions this year.

Against the yen the fall so far in January has been 3%, though trader positioning data on Friday showed large short positions against the yen remain.

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