FxWirePro Dollar looks to recover from Trump shock

Posted April 14, 2017

USA stock futures fell Thursday and European and Asian shares declined after Donald Trump said the dollar was getting "too strong".

Women walk past an electronic stock indicator of a securities firm in Tokyo, Thursday, April 13, 2017. The Shanghai Composite Index gained 0.1 percent to 3,275.96 and Hong Kong's Hang Seng retreated 0.2 percent to 24,261.66.

And it'll also allow the U.S.to focus on what is really important for USA economic and business interests trying to get better market access in China, and other issues like better protection of intellectual property rights.

The North Korea-related tensions have sent the cost to protect South Korean government debt against default soaring to 9 1/2-month highs.

In the same interview, he said his administration wouldn't formally accuse the country of manipulating its currency to gain a trade advantage, retreating from a core campaign promise. For its part, China was spared being named a currency manipulator by the USA which could have led to eventually a trade war. "They're not currency manipulators", Trump told The Wall Street Journal, saying Beijing hadn't been cheating on its currency for months.

The local central bank has no intention of intervening to keep the Taiwan dollar cheaper amid concerns that Taiwan will be named a currency manipulation country by Washington before the U.S. Department of Treasury comes up with an annual currency report later in the week, the dealers said.

"I think our dollar is getting too strong, and partially that's my fault because people have confidence in me", Trump said. That would mark the dollar's steepest weekly fall since before the U.S. presidential election in November and the sharpest yield drop since June previous year. Trump had said during his run for president that the Chinese were keeping their currency artificially week. "I describe Trump's influence on currencies as a hurricane as it's both harmful and unpredictable. It is debatable whether Trump can have both a weak currency and massive fiscal stimulus at the same time".

China's overall trade surplus rose in March after logging its first deficit in three years in February.

"There's some speculation that the downside pressures may not be sustainable from jawboning alone, but combined with the current swing into risk-off trades and the questions that are mounting over the new USA administration's ability to deliver against campaign promises, and the sell-off certainly looks warranted", Tony Cross, market analyst for TopTradr, said in a note.

The dollar pared earlier losses to rise slightly to 109.07 yen, after touching a five-month low earlier in the session.

That put the dollar on course for a fall of more than 1 per cent and the 10-year yield down 13 basis points this week. Brent crude, used to price worldwide oils, added 1 cent to $55.87. USA crude slipped 0.3 per cent to $52.95 a barrel, extending Wednesday's 0.5 per cent loss that saw it break a six-session winning streak. The dollar bought 56.595 rubles, compared with 56.608 rubles late Wednesday. The euro edged down to $1.0642 from $1.0665.