Dollar extends losses as Trump crisis fuels fears for agenda

AFP

© AFP | While the White House has denied any wrongdoing over claims Donald Trump urged then-FBI director James Comey to drop a probe, markets are worried it could throw the president’s agenda off-track

HONG KONG (AFP) – The dollar sank Wednesday with a fresh crisis in the White House fuelling concerns that Donald Trump’s economy-boosting agenda could be run off-track.

The administration was once again rocked by allegations over its links to Russia after it emerged the tycoon had divulged classified information to the nation’s foreign minister.

That was followed late Tuesday by claims by recently fired FBI boss James Comey that Trump pressed him to drop a probe into ex-national security advisor Michael Flynn over his links to Moscow.

While the Oval Office has furiously denied any wrongdoing, there is a growing sense of crisis that could even lead to the president’s impeachment, throwing into doubt his plans for tax cuts, big spending and red tape slashing.

Bets that the plan would fire the economy helped fan a dollar and global equities rally in the months after Trump’s election.

“There has been a lot of focus on the US president who admitted that he did share information with Russia,” said Greg McKenna, chief market strategist at AxiTrader.

“But what’s potentially important for markets in the weeks and months ahead is that the president’s apparent missteps may galvanise his opponents, which could make it harder to implement his economic agenda.”

– Difficult to buy –

The dollar took a beating in New York and extended the losses Wednesday. The euro was flirting with $1.11, a level not seen since Trump’s election win in November, while the yen is also piling pressure on the US unit. The dollar bought 112.67 yen, down from levels above 114 yen seen last week.

“At the very least the view is that Trump?s economic policies will be delayed over this, and the dollar is being sold,” Tomoichiro Kubota, an analyst at Matsui Securities in Tokyo, told Bloomberg News.

“At the moment there?s a strong sense of investors trying to gauge how far this will go. It’s a situation where you can’t completely rule out the possibility of impeachment down the road, so it?s difficult for investors to buy.”

A series of below-par economic readings out of Washington are also adding to dollar selling, while the euro is growing more attractive as political uncertainty in Europe abates and indicators point to a healthy pick-up in growth.

On equities markets Tokyo was down 0.5 percent by the break as the stronger yen weighed on exporters, while Sydney shed 0.8 percent and Seoul sank 0.1 percent.

Hong Kong and Shanghai were marginally lower, while Singapore, Taipei and Jakarta all retreated.

The losses came despite another record close in London and New York.

– Key figures around 0230 GMT –

Tokyo – Nikkei 225: DOWN 0.5 percent at 19,822.19 (break)

Hong Kong – Hang Seng: FLAT at 25,335.68

Shanghai – Composite: FLAT at 3,112.61

Euro/dollar: UP at $1.1099 from $1.1084 at 2100 GMT

Dollar/yen: DOWN at 112.60 yen from 113.07 yen

Pound/dollar: UP at $1.2922 from $1.2918

Oil – West Texas Intermediate: DOWN 57 cents at $48.09 per barrel

Oil – Brent North Sea: DOWN 54 cents at $51.11 per barrel

New York – Dow: DOWN less than 0.1 percent at 20,979.75 (close)

London – FTSE 100: UP 0.9 percent at 7,522.03 points (close)

Advertisements

Tags: , , , , , , , , , , , , , ,

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s


%d bloggers like this: