While you were sleeping: Dollar too strong for Trump

While you were sleeping: Dollar too strong for Trump

Jan. 18 (BusinessDesk) - The US dollar fell after President-elect Donald Trump said the currency was “too strong,” undermining the nation’s competitiveness abroad.

Trump, who will be sworn in on Friday, made the comments in an interview with the Wall Street Journal.

“The dollar is the guiding light at this point, and all eyes are on the shape US policy will take,” Fredrik Nerbrand, global head of asset allocation at HSBC Holdings in London, told Bloomberg. “I would put today’s dollar weakness down to noise rather than a structural shift.

“If Trump wants to become as growth-generative as he’s planning to be and you don’t have the same fiscal push coming from the rest of the world, then it’s a question of where does the capital flow to,” Nerbrand noted. “The dollar is the tallest pygmy.”

Meanwhile, the British pound strengthened after UK Prime Minister Theresa May eased some nerves about the country’s pending exit from the European Union when she said the nation’s parliament will get a vote on the final terms of the Brexit deal, though her comments made clear she is seeking a so-called hard exit—the country will leave the EU’s single market.

"I want to be clear: What I am proposing cannot mean membership of the single market," said May. "Instead we seek the greatest possible access to it through a new comprehensive, bold and ambitious free trade agreement."

Wall Street moved lower. In 1.20pm trading in New York, the Dow Jones Industrial Average fell 0.1 percent, while the Nasdaq Composite Index slid 0.5 percent. In 1.06pm trading, the Standard & Poor’s 500 Index declined 0.2 percent.

Meanwhile, US Treasuries rose, pushing yields on the 10-year note eight basis points lower to 2.32 percent. Gold, another safe-haven trade, also gained.

US financial markets were closed on Monday for Martin Luther King Jr Day.

The Dow slid as declines in shares of JPMorgan Chase and those of Goldman Sachs, recently 3.1 percent and 2.4 percent weaker respectively, outweighed gains in shares of Wal-Mart and those of Procter & Gamble, up 2.1 percent and 1.5 percent respectively.

Wal-Mart said it plans to create about 10,000 US jobs this year through the opening of 59 new, expanded and relocated Walmart and Sam’s Club facilities as well as e-commerce services.

In Europe, the Stoxx 600 Index ended the session with a 0.2 percent decline from the previous close. Germany’s DAX Index slipped 0.1 percent, while France’s CAC 40 Index fell 0.5 percent.

The UK’s FTSE 100 Index dropped 1.5 percent, as the pound’s rebound hurt shares of exporters.

(BusinessDesk)

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