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Weekly roundup: Political concerns weighed on the US dollar

currency-newsWeekly roundup: Political concerns weighed on the US dollar
Political concerns weighed on the US dollar last week, with fresh scandal embroiling the White House. First, it was discovered that President Donald Trump had revealed classified information during his meeting with a Russian ambassador. Later, a leaked memo from former FBI Director James Comey - whom Trump had unceremoniously and unexpected fired recently - suggested the President tried to pressure him into dropping investigations into the links between former National Security Advisor Michael Flynn and Russia.

These scandals have several implications for Trump’s economic plans for the US; anticipation of which has kept the US dollar largely rising since his election. Firstly, having to fight multiple fires is distracting the current administration from putting their policies into action, delaying any positive economic reforms.

Secondly, each controversy hikes tensions between Trump and the Republican Party. With the Republicans having only a narrow majority in Congress, Trump needs the support of the entire party. If he continues to make enemies of his own party, it is highly unlikely the President will be able to implement any of the vast spending and tax reform plans he promised.

This fear is keeping the US dollar soft, with USD finding little support from the week’s sparse data calendar.

There is much more going on this week to keep the US dollar on the move. As well as speeches from several Federal Reserve officials throughout the week, the minutes from the Federal Open Market Committee’s (FOMC) 3rd May meeting will be released on Wednesday. Markets are expecting the FOMC to vote to hike interest rates in June, so the US dollar will move depending upon whether the minutes are perceived as optimistic or pessimistic on the economy.
 
Philip McHugh

Philip McHugh

Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure

Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)

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