Home / dollar / 2017-03-27 : Trump slump: Dollar sinks to four-month low and Dow Jones heads for longest losing streak since 2011 on reflation trade doubts

2017-03-27 : Trump slump: Dollar sinks to four-month low and Dow Jones heads for longest losing streak since 2011 on reflation trade doubts

collected by :Irax John

Doubts about the narrative at the heart of the “Trump trade” – that the President’s expansionary fiscal stance will boost growth and inflation alike – have multiplied.
Not surprisingly, that has also meant that the flattening of the expected Fed rate path has been accompanied by risk aversion.
Fed rate hike speculation cooled, undermining yield-based support for the benchmark currency, after last week’s failure of the AHCA healthcare reform bill.
The measure’s fate was treated as a referendum on the Trump administration’s ability to turn campaign rhetoric into policy.
Stocks suffered in Asian trade and the perennially anti-risk Japanese Yen dutifully advanced, proving to be the strongest performer in G10 FX.

Trump slump: Dollar sinks to four-month low and Dow Jones heads for longest losing streak since 2011 on reflation trade doubts

as mentioned in The dollar weakness lifted the pound across $1.26 against the US dollar for the first time since February 2, while the euro surged to a four-month high of $1.09.
The dollar index, which hit a 14-year high in early January, sank below 99.0 for the first time since November 11, two days after Trump’s presidential victory.
The dollar plunged to a four-month low and US equities came under heavy selling pressure as investors lost confidence in Donald Trump’s ability to deliver on his ambitious economic agenda, after Friday’s healthcare reform defeat.
In a stunning setback, the US President failed to rally enough support from his own Republican party to repeal and replace Obamacare, which was billed as his first major test since taking office in January.

Trump slump: Dollar sinks to four-month low and Dow Jones heads for longest losing streak since 2011 on reflation trade doubts

as mentioned in Still, euro rally will be primarily driven by dollar flows and to that end, both fixed income and equity markets will be key today.
On Friday President Trump abandoned his efforts to reform the ACA colloquially known as Obamacare, when a combination of moderate and ultra-conservative Republicans refused to vote for the legislation.
While consumption in Germany still remains restrained, business demand has clearly picked up and that should be welcome news to the ECB.
With no economic data on the docket in US, equities will likely drive trade in the FX for the rest of the day.
Market Drivers March 27, 2017USDJPY nears 110.00 supportIFO BeatsNikkei -1.44% Dax -0.69%Oil $47/bblGold $1257/oz.

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