Reuters logo
FOREX-Dollar slumps as Trump fails to clarify economic policies
January 12, 2017 / 12:56 AM / 10 months ago

FOREX-Dollar slumps as Trump fails to clarify economic policies

* President-elect’s first news conference disappoints dollar bulls

* Dollar wallows near one-month lows vs safe-haven yen

* Bucking weak dollar trend, Mexican peso falls to record low

TOKYO, Jan 12 (Reuters) - The dollar sagged against the perceived safe-haven yen on Thursday, after President-elect Donald Trump’s highly-anticipated news conference failed to spell out details on his promises to boost fiscal spending and cut taxes.

Trump, who takes office on Jan. 20, did not elaborate on his pro-growth policies, and instead took aim at targets that included pharmaceutical companies and U.S. intelligence agencies. He accused the latter of practices reminiscent of Nazi Germany after leaks led to some U.S. media outlets to report unsubstantiated claims that he was caught in a compromising position in Russia.

The greenback fell as low as 114.245 yen on Wednesday, its deepest nadir since Nov. 9, and last stood at 114.99, down 0.4 percent on the day.

“There’s ‘Good Trump’ and ‘Bad Trump’ for the markets. Will ‘Good Trump’ return before the inauguration?” said Ayako Sera, market strategist at Sumitomo Mitsui Trust Bank in Tokyo.

“We need to see if the overnight dollar low holds in today’s Tokyo session,” she added.

The dollar index, which tracks the U.S. currency against a basket of six major counterparts, was down 0.1 percent at 101.65 . It had risen to a one-week high on Wednesday, ahead of Trump’s news conference.

The dollar index climbed to its highest levels since 2002 last week, as investors bet Trump’s promises of fiscal expansion and tax cuts would boost growth and inflation, prompting a faster pace of interest rate hikes from the Federal Reserve.

The euro, which had skidded to a 14-year low of $1.0340 last week, added 0.1 percent to $1.0595.

Lower U.S. Treasury yields also undermined the dollar, as Trump’s remarks increased the safe-haven appeal of U.S. government debt.

The benchmark yield fell to a one-month lows, as strong demand at an auction also pushed up prices.

Bucking the weak dollar trend, the Mexican peso hit a fresh record low against the greenback of 22.0440 pesos on Wednesday, after Trump warned U.S. auto companies would face a high tax for products made in that country. (Reporting by Tokyo markets team; Editing by Shri Navaratnam)

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below