World Economy

Dollar Dragged Down by White House Chaos

Dollar Dragged Down by White House ChaosDollar Dragged Down by White House Chaos

The dollar has endured its worst run in six years amid chaos in the White House. As Wall Street closed Monday night, the greenback recorded its fifth consecutive monthly fall against a basket of global currencies, down 2.9% over the month, in what has been its worst run since April 2011.

President Donald Trump loves to trumpet the record run in US stocks. “Stock market hits another high with spirit and enthusiasm so positive,” he tweeted on July 12, in one of nine posts about the market in the past month. He was at it again Monday, exclaiming “Highest Stock Market EVER” in a morning tweet, news outlets reported.

But he’s hardly tweeted a word about another, less rosy measure of Trump’s America: the US dollar. The greenback has fallen hard on his watch and currency traders are now betting on even more declines.

The dollar weakened further late in the day, as uncertainty over the US political outlook increased after the departure of White House communications director Anthony Scaramucci, but then pared some losses.

The dollar index, which measures the greenback against a basket of six major currencies, hit its lowest since early May 2016 of 92.786 after the news of Scaramucci’s departure, Reuters reported.

The dollar also hit a more than six-week low against the Japanese yen of 110.22.

Doubts surrounding the likelihood of Trump realizing his pro-growth agenda, including tax reform, have hurt the dollar and contributed to the dollar index’s roughly 2.9% decline in July.

The dollar is now down more than 9% so far this year, its worst performance for the first seven months of the year since 1986 when it fell 12.5%.

“What’s most interesting is the way that so many policy decisions and risk events get played out through currency markets these days,” said Mark Haefele, the global chief investment officer at UBS Wealth Management, which oversees more than $2 trillion, Bloomberg reported.

To be fair, the dollar has also come under pressure from lackluster economic data, which weakened the case for higher interest rates in the US as central banks elsewhere move to tighten. And Trump, on more than one occasion, has talked about wanting a weaker dollar and complained that its strength is a negative for US manufacturing—a key part of his “America First” agenda.

Concerns that low US inflation could lead to a more dovish Federal Reserve also have hurt the greenback.

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