U.S dollar fell sharply on Wednesday after with an interview with Wall Street journal Donald Trump said that the “U.S dollar is getting too strong” and he would prefer to keep the interest rate low.
After his interview, Wall street Journal dollar index which measure the U.S dollar strength against sixteen other currencies, decrease 0.3% to 90.2. The index was generally flat ahead of the Journal story. U.S dollar also fell 0.4% against the Yen and 1.2% selloff on Tuesday. Donald Trump also mentioned that in the upcoming report due this week his administration would not label China as currency administration.
Donald Trump also left his option open to reappoint Federal Reserve Chairwoman Jannet Yellen for the next term after the end of her tenure next year; this stance is proved to be another shift of presidential campaign stance in which he mentioned that he would “most likely” not appoint her again for another term as chairwoman of Federal Reserve.
Investors are also concerned recent days about the escalating tension between Russia, U.S and North Korea. Trump administration amongst the increasing worried about North Korea’s nuclear program has threatened to take action against North Korea. Donald Tump also urged China to help against North Korea, saying that cooperation could help its trade terms.
U.S secretary of State Rex Tillerson, in his visit to Russia; on Tuesday accused Russia of trying to cover up a alleged chemical weapon attack in Syria that triggered U.S strike on Syrian air base. U.S is holding talks with Russia about the confrontation about Moscow’s ties with Syria’s Asad’s regime.
Market is anticipating that the political development is overshadowing the economic news for now.
This week Retail sales and inflation data could offer new insight into the health of US economy. For now in the absence of data that materially affects the time frame of Federal Reserve policy tightening, US political development have much more scope to move currency exchange rates.