Dollar falls broadly after Trump did not give details on his stimulus plans: Jan 12, 2017
|Market Review - 11/01/2017 22:00GMT
Dollar falls broadly after Trump did not give details on his stimulus plans
The following market summary is taken from Reuters forex report.
The U.S. dollar fell to a one-month low against a basket of major rivals on Wednesday, reversing an early rally after a news conference held by President-elect Donald Trump disappointed dollar bulls who were expecting a pro-growth message.
The greenback, which hit one-week highs against the euro and franc and a three-month high against sterling before the conference, turned negative against those currencies after Trump attacked U.S. intelligence agencies and denounced claims he had been caught in a compromising position in Russia but did not elaborate on his economic policy agenda.
Investors have been betting Trump will boost public spending and spur repatriation of overseas funds by U.S. companies, policies expected to bring higher inflation and induce the Federal Reserve to raise interest rates at a steady pace.
Those bets have driven the dollar index, which measures the greenback against a basket of six major currencies, up 4 percent since the Nov. 8 election and to a 14-year high of 103.820 on Jan. 3.
The dollar index, which hit a one-week high before the conference of 102.950, sank to its lowest since Dec. 14 at 101.280 after it had ended. The index pared losses later in afternoon U.S. trading and was last down 0.15 percent at 101.860.
The euro rose as much as 0.6 percent against the dollar after the conference to a session high of $1.0622, just below an 11-day high of $1.0626 struck on Tuesday and rising from a one-week low of $1.0455 struck earlier.
The dollar sank about 1.3 percent against the yen to a one-month low of 114.26 yen after gaining as much 0.9 percent to 116.85 yen before the conference. Sterling, which had fallen more than 1 percent to a three-month low of $1.2038 before Trump's comments, later rallied 0.8 percent to $1.2273.
The Mexican peso hit a fresh record low against the dollar of 22.0440 pesos, marking an exception to the broad dollar weakness after Trump warned U.S. auto companies would face a high tax for products made south of the border.
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