Skip to main content

Dollar slips, shares unstable after Trump’s protectionist address

Trump

The dollar slid broadly on Monday after U.S. President Donald Trump struck a protectionist tone in his inauguration speech, prompting developed and emerging market currencies to gain.

The drops and gains were due to the Trump administration’s intention, on its first day in office, to withdraw from the Trans-Pacific Partnership (TPP).

In his inaugural address, Trump pledged to end what he called an “American carnage” of rusted factories, and vowed to put “America first”.

He laid out two simple rules – buy American and hire American.

Trump also said on Sunday that he planned talks with leaders of Canada and Mexico to begin renegotiating the North American Free Trade Agreement (NAFTA).

Members of the TPP are U.S., Japan, Malaysia, Vietnam, Singapore, Brunei, Australia, New Zealand, Canada, Mexico, Chile and Peru.

The pact aims to deepen economic ties between these nations, slashing tariffs and fostering trade to boost growth.

The dollar fell as much as 1.2 per cent against the yen to 113.26 yen, edging towards its seven-week low of 112.57 yen touched on Wednesday.

U.S. stock futures dipped 0.3 per cent, erasing gains made on Friday

The 10-year U.S. treasuries’ yield fell to 2.435 per cent, after having risen briefly on Friday to 2.513 per cent – its highest since Jan. 3.

Japan’s Nikkei dropped 1.1 per cent while shares in Australia dropped 0.8 per cent.

The euro gained 0.5 per cent to $1.0754, its highest level since Dec. 8.

Emerging market currencies gained, with South African rand gaining 0.8 per cent.

The Mexican peso, which has weakened the most on Trump’s protectionist and anti-immigration stance, rose 0.8 per cent to a two-week high of 21.415 per dollar..

Gold hit a two-month high of $1,219.3 per ounce.

European shares were expected to fall, too, with spread-betters looking to a drop of 0.4 per cent in Britain’s FTSE and 0.3 per cent in Germany’s DAX.

“The market is getting nervous about the possibility that the world’s trade might shrink,” said Koichi Yoshikawa, Executive Director of Financial Markets at Standard Chartered Bank in Tokyo.

“Many of his policies, including tax cuts and infrastructure spending, need approval from the senate and that (may not be) easy.

“The markets that had been led by expectations on his policy since the election are now the dragged down by the reality.”

The dollar had soared late last year on expectations that Trump’s pledges to cut taxes and hike infrastructure spending would boost the U.S. economy, spurring inflation and higher interest rates.

But optimism is starting to fade as details of his tax policies remained sketchy. It is not clear if the Congress will agree to any plan that could drastically increase budget deficits.

Labels

Labels:

Comments

Post a Comment

Popular posts from this blog

Pope not involved in Colombian peace deal- Vatican

Pope Francis Pope Francis has turned down a request to play a role in the peace deal between the Colombian government and the Revolutionary Armed Forces of Colombia (FARC) rebel group. The Vatican in a statement issued on Wednesday in in Vatican City said that an invitation was sent to his Holiness in early August to appoint a representative to participate in the committee that selected the judges for the talks. The statement said that though Pope Francis supported the peace process, he, however, reiterated that he would not get involved in Colombian peace deal. It said that Pope was praying for the enlightenment of the hearts and minds of those who were called to promote the common good of the Colombian nation. A deal was announced last week, putting an end to five decades of internal conflict between government forces and the FARC rebels. The agreement, which needed to be ratified through a referendum in Oct. 2, would entail setting up a special court to grant amnesties or pu...
Post a Comment
Read more

Houthis Claim Attack on Central Israel in Response to Gaza ‘Massacres’

The ongoing conflict between Israel and Hamas has taken a concerning regional turn as the Houthi rebels in Yemen claimed responsibility for an attack on central Israel. The group announced this as part of their escalating response to what they describe as "massacres" in Gaza amid the Israeli military’s operations in the strip. Details of the Attack The Houthis, a Shiite militant group with ties to Iran, declared that they launched missile and drone strikes targeting Israel. While the exact impact of these attacks remains unclear, reports suggest that Israel’s defense systems intercepted several threats over its airspace. This marks a significant escalation as the Houthis widen their involvement in the conflict beyond their typical operations within Yemen and neighboring Saudi Arabia. The Houthis’ Justification In their statement, the Houthis framed the attack as retaliation for Israel’s military actions in Gaza, which they characterized as indiscriminate bombings resultin...
Post a Comment
Read more

Fall of Assad is a Blow to Russia's Prestige

The potential fall of Syrian President Bashar al-Assad, a long-standing ally of Russia, would mark a turning point in Moscow’s global influence, particularly in the Middle East. Steve Rosenberg’s analysis underscores the profound implications for Russia, which has invested heavily—both militarily and politically—in ensuring Assad’s survival over the past decade. This article delves into why Assad’s downfall would strike at the core of Russian prestige and what it could mean for the broader geopolitical landscape. Russia's Strategic Commitment to Syria Since the outbreak of the Syrian civil war in 2011, Russia has been a staunch supporter of Assad's regime. In 2015, Moscow launched a military intervention that proved decisive in stabilizing Assad’s hold on power. This intervention solidified Russia's role as a key power broker in the Middle East and demonstrated its willingness to project military power far beyond its borders. Syria is not just an ally for Russia; it is a...
Post a Comment
Read more