Dollar Slumps After Trump Says Currency Is Getting 'Too Strong'

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Includes: UDN, USDU, UUP
by: Investing.com

The dollar fell to session lows against a basket of major currencies on Wednesday, after President Donald Trump said the currency is getting too strong while geopolitical concerns continued to weigh on sentiment.

President Trump told the Wall Street Journal on Wednesday, that he thinks the currency (dollar) is getting too strong and hinted that he may reappoint Janet Yellen to chair the Federal Reserve Board when her term ends in 2018, as he added "I do like a low-interest rate policy, I must be honest with you,"

It wasn't the first time President Donald Trump expressed concern over the strength of the dollar, after he previously warned in January, that a soaring greenback has disadvantages for U.S. companies that do a lot of business abroad.

The U.S. dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, fell by 0.31% to 100.31.

Trump's comments came against rising geopolitical tensions, which has caused a flight to safety, as investors shun risk assets in favor of traditional safe-haven assets such as gold, U.S. treasuries and the yen.

USD/JPY fell by 0.37% to trade at 109.17 while USD/CAD dipped 0.38% to $1.3276.

GBP/USD traded higher at $1.2532 while EUR/USD traded at $1.0659, up 0.53%.

The slump in the dollar boosted dollar-denominated gold prices, as the yellow metal rose $9.75, or 0.77%, to $1,283.95 a troy ounce by 16:48 EDT.

Dollar denominated assets such as gold are sensitive to moves in the dollar - a slump in the greenback, tends to increase demand for the yellow metal, as it becomes cheaper for foreign buyers.

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