USD: It is still all Trump all the time - Rabobank
|Michael Every, Head of FMR at Rabobank, notes that for markets, it is still all Trump all the time as yesterday saw the Dow dip slightly, the USD slump (DXY now sub 100 for the first time since mid-November), and 10-year US Treasury yields tumble further to 2.40%, all as another wave of Trumpisms hit us.
Key Quotes
“Most important, perhaps, was Treasury Secretary nominee Mnuchin stating than an “excessively strong dollar” could have a negative short-term effect on the economy. (Even MXN rallied on that news!)”
“However, let’s not forget that President Trump also officially withdrew from the Trans-Pacific Partnership (TPP) trade deal. That may not have come as a surprise, but it was the final coup-de-grace for the much maligned ‘gold standard’ of global trade deals, and the full ramifications of its demise are yet to be seen. Trump also reaffirmed that a “major” US border tax was looming. As such, it looks like many firms will soon have to decide which side of the US border their production is going to be on. Given the market response to that idea - as opposed to the postelection stock and USD euphoria - one can only presume that market participants thought Trump was not serious about his protectionist threats (whereas he was serious about deregulation and tax cuts - talk about selective hearing and ‘efficient markets’?!)”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.