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In
the first full day of U.S. trading since Trump's comments in an
article in the Wall Street Journal, the arrival of traders at
their desks in New York saw the currency sink past $1.07 per
euro for the first time since Dec. 8.
It also fell to a 7-week low of 112.74 yen, with traders also
citing Trump's tweets criticizing a Republican plan on border
tax adjustments which had been expected to support the dollar.
"Underlying it all is an apparent change of heart from Trump on
the border tax and what it might or might not do for the
dollar," said National Australia Bank's head of forex strategy
Nick Parsons.
"The dollar is down against every one of the majors and the
emerging market currencies so it's a clean sweep...Trump's
tweets spoke in negative terms about the tax so the dollar has
come off as a result."
The dollar surged at the end of last year on the back of
expectations of stimulus from the new administration that would
boost U.S. economic growth and feed demand for the dollar.
But having labeled China a currency manipulator, Trump has
continued to strike a firm tone toward Beijing and his
protectionist rhetoric is beginning to play a larger role in
investors' thinking.
In an interview with the Wall Street Journal he said: "I would
talk to them (China) first," but "our companies can't compete
with them now because our currency is strong and it's killing
us."
(Writing by Patrick Graham)
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