Dollar falls broadly on Trump's currency comments

By Daniel Leussink

 

Bank notes of Euro, Hong Kong dollar, U.S. dollar, Japanese yen, GB pound and Chinese yuan are seen in this picture illustration, January 21, 2016. REUTERS/Jason Lee/Illustration

 

TOKYO (Reuters) - The dollar slumped against the yen and other major peers on Monday after U.S. President Donald Trump expressed discomfort with the greenback's strength and global finance leaders ended a weekend meeting with little consensus on how to resolve multiple disputes over U.S. tariff actions.

 

The dollar extended losses after CNBC reported on Friday that Trump was worried the Federal Reserve will raise interest rates twice more this year. Trump said the Fed's policy tightening and the strong dollar could hurt the U.S. economy.

 

The dollar index <.DXY>, a measure of its value against a basket of six major currencies, was down 0.2 percent at 94.251 on Monday, slipping further from a one-year high of 95.652 touched on July 19.

 

Against the yen, the dollar fell for the third day to a low of 110.85 yen, its weakest level since changing hands at 110.77 yen on July 11. It was last off about 0.4 percent at 111.06 yen.

 

The yen was also driven up after Reuters and other media reported that the Bank of Japan is actively discussing changes to its policies.

 

The BOJ is scheduled to hold its next monetary policy meeting on July 30 and 31.

 

Against the euro <EUR=>, the dollar slipped 0.2 percent to $1.1742.

 

At a weekend meeting in Buenos Aires, finance ministers and central bank governors from the world's 20 largest economies called for stepped-up dialogue to prevent trade and geopolitical tensions from hurting growth.

 

The meeting came at a time of an escalating trade dispute between the United States and China, which have so far slapped tariffs on $34 billion worth of each other's goods.

 

Trump raised the stakes on Friday with a threat to impose tariffs on all $500 billion of Chinese exports to the United States unless Beijing agrees to major structural changes to its technology transfer, industrial subsidy and joint venture policies.

 

Osamu Takashima, head of G10 FX strategy, Japan at Citigroup Global Markets Japan, said while Trump's comments would be a negative for the dollar, a bigger concern for the market would be increased uncertainty.

 

"At the moment, we don't know what kind of pressure or comments could come from the U.S. side," said Takashima.

 

"At the same time, U.S. yields look like they are bottoming out. The reason why President Trump is becoming very nervous on the U.S. dollar is because the Fed, led by Chair (Jerome) Powell, is continuing policy firming. Under such circumstance, the fundamentals look rather positive for the U.S. dollar overall," he said.

 

The Canadian dollar <CAD=D3> traded nearly flat against the U.S. dollar, changing hands at 1.3126 Canadian dollars.

 

It had rallied about 1.4 percent on Friday after strong retail sales and inflation data reinforced expectations for another interest rate hike by the Bank of Canada this year.

 

(Editing by Shri Navaratnam)

 

-- © Copyright Reuters 2018-07-23

Story headlines sucked me in to read this and it turned out to be nothing story. Normal over reaction when it comes to anything Trump.

22 minutes ago, pmarlin said:

Story headlines sucked me in to read this and it turned out to be nothing story. Normal over reaction when it comes to anything Trump.

He overheats the economy with a tax break and huge spending bill and then complains the Fed wants to raise interest rates after a long spell of quantitative easing.  There's no way to fix stupid.

LOTUS Trump knows all  .......   better than the experts    !!!

Edited July 23, 20187 yr by puck2

Good morning America how are you? Oh sorry, still sleeping...

5 hours ago, zaphod reborn said:

He overheats the economy with a tax break and huge spending bill and then complains the Fed wants to raise interest rates after a long spell of quantitative easing.  There's no way to fix stupid.

Trump's trillion dollar debt funding the tax break was to be paid from a new 5%+ GDP growth rate at a time of almost full employment that in itself would result in inflation. Meanwhile, Trump endangers economic growth with his tariff wars.

There's no limit to his ridiculousness.

 

But Trump is only encouraged by his senior economic advisor Kudlow: “My hope is that the [Federal Reserve] under its new management understands that more people working and faster economic growth do not cause inflation,” That's new management appointed by Trump.

Versus:
Macroeconomic theory followed by most Fed policymakers suggests that typically, faster economic growth and lower unemployment boost inflation.

https://www.ft.com/content/a192dd42-7b96-11e8-bc55-50daf11b720d

 

 

Now I freely admit to being "a bear of very little brain" when it comes to matters financial.

 

I do some work for a Chinese company, my salary is quoted in RMB, then changed to US dollars before being paid into my That bank, where it is changed again to Baht. 

 

The alternative is PayPal, but their charges and rates make "The Pirates of The Caribbean" look like honest brokers, and they will only allow cash to be drawn through my UK bank, which adds another level. 

 

Going back to the RMB - US dollars - ThB process, do the various ups and downs mean + or - ?

 

Confused of Chiang Rai.

 

Im still wondering about the usa triple AAA rating being genuine.

 

@maximillian who should have been elected to set the usa on the political correct course bernie sanders????

 

--------------------------------------------

wbrr

roobaa01

Zero point two percent... OMG, it the USA version of the Asian Tigers of the late nineties! 

I just would like to hear what Mr. King Dollar has to say as a Trump advisor. I hope he has fully recovered from his heart attack. 

Numerous off-topic posts and replies have been removed.  

 

This topic is about the dollar.   Continued gratuitous political commentary that is off-topic will earn suspensions.  

 

The rise and fall of the dollar does affect a lot of people, so please stay on topic.   It is most annoying to wade through pages and pages of nonsense to find a reasonable comment about the topic.