(MENAFN- Gulf Times) The dollar retreated yesterday, with warnings of wild volatility ahead, as Donald Trump began his presidency by attacking global trade deals and promising to put America first.
With trading floors ravaged by uncertainty over the US leader's plans, many key stock markets also fell, with Wall Street, London, Frankfurt, Paris and Tokyo all lower. Londn's FTSE 100 lost 0.7% at 7,151.18 points yesterday. Frankfurt's DAX 30 was down 0.7% at 11,545.75.
'America first, markets second, said LCG analyst Jasper Lawler of the day's sentiment on trading floors.
'Attempts to break out into new highs for the year have been temporarily shelved after Donald Trump opted for a protectionist, anti-establishment inauguration address, his note to clients added.
There was, however, 'no clear sense of capitulation in markets yet.
In foreign exchange, the euro hit a six-week intra-day high against the dollar at $1.0755.
'The greenback seems to have been shaken both by the apocalyptic tone set by Trump at his inauguration, and the global protests that greeted the former Apprentice host's ascension to the highest office in the land, said Spreadex analyst Connor Campbell.
Trump's inauguration speech on Friday continued his campaign rhetoric, saying 'every decision on trade, on taxes, on immigration, on foreign affairs will be made to benefit American workers and American families.
On Sunday he vowed to start renegotiating the North American Free-Trade Agreement during upcoming talks with Mexico and Canada.
Doubts about his spending promises also took their toll on the US currency.
'Sellers swiftly exploited the lack of clarity in the speech regarding the proposed fiscal stimulus measures, said Lukman Otunuga, an analyst at FXTM, predicting more trouble ahead for the greenback.
'The growing threat of Donald Trump's proposed fiscal stimulus failing to keep up with market expectations may ensure dollar weakness becomes a recurrent theme in the short term, he said.
The US unit was down more than 4% on the yen from the highs touched late in December. It was also well down against the euro and even against the pound despite concerns about Britain's exit from the European Union.
'I suspect we're entering extremely volatile times for the dollar, Stephen Innes, senior trader at OANDA, said in a note.
Trump last week said the greenback was too strong against China's yuan and claimed this was 'killing the US economy.
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.