🤑 It doesn’t get more affordable. Grab this 60% OFF Black Friday offer before it disappears…CLAIM SALE

CORRECTED-FOREX-Dollar slumps after Trump offers no details on economic policies

Published 12/01/2017, 05:15 pm
© Reuters.  CORRECTED-FOREX-Dollar slumps after Trump offers no details on economic policies
EUR/USD
-
USD/JPY
-
DX
-
US10YT=X
-
DXY
-

(Corrects date of dollar's low against yen in third paragraph)

* President-elect's first news conference disappoints dollar bulls

* Dollar wallows near one-month lows vs safe-haven yen

* Bucking weak dollar trend, Mexican peso falls to record low

TOKYO, Jan 12 (Reuters) - The dollar skidded on Thursday, moving back toward one-month lows against the perceived safe-haven yen, after President-elect Donald Trump's highly-awaited news conference failed to offer details on his promises to boost fiscal spending and cut taxes.

Trump, who takes office on Jan. 20, did not elaborate on his planned growth policies, and instead took aim at targets that included pharmaceutical companies and U.S. intelligence agencies. greenback fell as low as 114.245 yen JPY= on Wednesday, its deepest nadir since Dec. 9, and last stood at 114.52, down 0.8 percent on the day.

"There's 'Good Trump' and 'Bad Trump' for the markets. Will 'Good Trump' return before the inauguration?" said Ayako Sera, market strategist at Sumitomo Mitsui Trust Bank in Tokyo.

"We need to see if the overnight dollar low holds in today's Tokyo session," she added.

The dollar index, which tracks the U.S. currency against a basket of six major counterparts, slipped 0.4 percent to 101.42 .DXY . It had risen to a one-week high on Wednesday, ahead of Trump's news conference.

The dollar index had climbed to its highest levels since 2002 as investors bet Trump's promises of fiscal expansion and tax cuts would boost growth and inflation, prompting a faster pace of interest rate hikes from the Federal Reserve and boosting the yield on the greenback.

While some investors who missed out on the dollar's post-election rally were still looking to buy on dips, others were seeking to pare their long dollar positions in case the coming reality of Trump's administration fail to live up to expectations, Tokyo market participants said.

The euro added 0.2 percent to $1.0605, after skidding to a 14-year low of $1.0340 EUR= last week.

But against the yen, the euro slipped 0.6 percent to 121.41 yen EURJPY= , closing in on its overnight low of 121.275, which was its lowest since Dec. 9.

Lower U.S. Treasury yields also undermined the dollar, as Trump's remarks increased the safe-haven appeal of U.S. government debt.

The benchmark yield fell to a one-month lows, as strong demand at an auction also pushed up prices. US/

In Asian trading, the yield on 10-year U.S. notes US10YT=RR stood at 2.332 percent, down from Wednesday's U.S. close of 2.370 percent.

Bucking the weak dollar trend, the Mexican peso hit a fresh record low against the greenback of 22.0440 pesos MXN=D2 on Wednesday, after Trump warned U.S. auto companies would face a high tax for products made in that country and exported to America.

"The fall is very natural after what Trump has been saying about the Mexican relationship, but I also think that maybe the selling is almost over as he is saying nothing new," said Masashi Murata, senior currency strategist at Brown Brothers Harriman in Tokyo.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.