Dollar Tumbles

The US dollar has taken a sharp drop on Tuesday, with serious doubts about President Trump’s healthcare reforms adding to doubts about the administration being able to follow its policy agenda, CNBC reported. Against the euro, the US currency rose to $1.15, its highest since May of last year, providing a boost for those heading on holiday in the US. With the Republicans abandoning plans to agree a replacement for Obamacare, serious doubts are growing among investors about Trump’s wider economic strategy. The sharp rise in the US dollar immediately after his election–part of the so-called “ Trump trade”–was based in part on a view that his plans to cut taxes for companies and individuals would boost the economy. Investors are now, however, increasingly concerned about the lackluster rate of US economic growth and inflation, with retail sales and consumer price figures last Friday coming in weaker than anticipated. Meanwhile, whether Trump can get political support for his tax-cutting agenda is increasingly being called into question.