Reuters logo
FOREX-Trump bump to Trump slump: dollar posts worst week in 10 months
May 19, 2017 / 11:49 AM / 6 months ago

FOREX-Trump bump to Trump slump: dollar posts worst week in 10 months

* Political tumult in Washington weighs on greenback

* Dollar index poised for weekly loss of 1.6 pct

* Euro hits 6-month high

* Graphic: World FX rates in 2017 tmsnrt.rs/2egbfVh

By Jemima Kelly

LONDON, May 19 (Reuters) - The dollar was on track to record its worst week against a basket of currencies since July on Friday, having given up almost all the gains made since Donald Trump, now surrounded by political worries, was elected U.S. president last year.

The dollar index, which measures the greenback against a basket of six major rivals including a heavily weighted euro, has fallen around 1.8 percent this week. On Wednesday it hit its lowest since Nov. 9, the day of the U.S. election results, and traded close to that level on Friday.

Uproar over Trump’s firing of James Comey as FBI director and allegations, repeatedly denied, of links between the president’s team and Russia, have pressured the dollar.

The U.S. currency has also suffered from a resurgent euro, which has gained more than 2 percent this week - on track for its best performance since June - and rose 0.7 percent on Friday to hit a six-month high of $1.11745.

That resurgence, said analysts, was a result of a renewed focus on a possible winding back of the European Central Bank’s expansive monetary stimulus programme, with data pointing to a robust recovery in the euro zone.

“Now that the French election is out of the way, political risk has fallen in Europe, and markets are refocusing on monetary policy, where the focus is on imminent tightening from the ECB,” said Commerzbank currency strategist Thu Lan Nguyen, in Frankfurt.

Analysts the dollar was also being pressured by fears that Trump’s travails could delay or derail promised fiscal stimulus measures.

“The market is fearful now that the cuts in regulation, the tax incentives, etc., just won’t be forthcoming because the administration will be so busy fire-fighting scandals, it won’t be able to push through any of its promises,” said Rabobank currency strategist Jane Foley, in London.

Foley added that worries over Trump had also coincided with a run of weaker U.S. data that has seen a slight pull-back of expectations that the Federal Reserve will hike interest rates next month, which had also pressured the dollar.

Against the safe-haven yen, the dollar edged down 0.1 percent to 111.35 and was on track for its first week of falls in five, with risk appetite having fallen across markets this week.

For Reuters Live Markets blog on European and UK stock markets see reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageId=livemarkets (Additional reporting by Masayuki Kitano in Singapore; Editing by Andrew Heavens)

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below