Forex: US dollar falls - Trump talks about currency war


AtlantisFX | The US dollar fell on Wednesday after President Donald Trump fired another broadside against the eurozone and China, accusing them of making competitive devaluations to "exploit" the US.


His comments are the clearest indication so far that the government is in a "currency war" with major trading partners, prompting analysts to fear that global business confidence and trade will suffer further blows.


"These people are valuing their currency because they are not feeling well towards us," Trump told Fox Business News in an interview. "So they depreciate and we can not do it, we're not on par."


Trump had earlier reiterated his frustration with Federal Reserve Chairman Jerome Powell for not lowering interest rates, less than a day after Powell said in a speech that the Fed still wanted to see how much the economy was going through the ongoing one Trade war with China slows down. Powell's comments had helped lift the dollar from a three-month low he reached last week after the central bank opened the door to interest rate cuts this year.


U.S. Pat. The Dollar Index, which represents the strength of the dollar against a basket of six major currencies, rose 0.1% to 95,713 at 10:39 am ET (14:39 GMT).


Trump told Fox that Powell was doing "bad work" not to cut interest rates, and he negatively compared it to European Central Bank President Mario Draghi, who said last week that the Eurozone economy is giving further impetus would need if inflation did not recover.


"We should have Draghi instead of our Fed chairman," Trump said.


The Dollar Index fell about a quarter of a percent after the interview, after rising overnight due to Powell's comments. At 13.00 ET (1600 GMT), it was 95.583, a decrease of 0.1% from the opening daily rate.


The dollar had risen the day before after Treasury Secretary Steve Mnuchin said a US-China trade agreement was "90% complete". Trump told Fox that he was "very happy" with the current trading situation with China.


Trump and Chinese President Xi Jinping are scheduled to meet on Saturday on the sidelines of the G20 summit, and traders hope they will avoid an escalation of trade barriers.


The official US comments were in contradiction to some voices from China. Hu Xijin, editor-in-chief of the Global Times, an English-speaking mouthpiece from Beijing, tweeted: "No Chinese official is so optimistic now that the Chinese state media have repeatedly criticized the United States, a few hours before the Xi Trump summit the previous summits in China and the US had never occurred. "


Elsewhere, the euro was up 0.2%, with EUR / USD reaching $ 1.1383, while GBP / USD was stable at $ 1.2693 and the USD / CAD fell 0.4% to hit 1.3110.


Previously, there had been little response to the big data release of the day. Commodity orders fell 1.3% in May, well below expectations, although the news was clouded by the fact that core durable goods orders, which do not include the volatile transport sector, rose 0.3%.

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