What a week it’s been for the US Dollar and more specifically, the Trump administration. If you compare the similarities between Watergate and Trump’s alleged ties with Russia, its easy to predict what might happen in the coming weeks and months.
Democrats have called for Trump to be impeached, the growing concerns around his Presidency pose huge risks to national security, with the latest developments suggesting that Trump provided Russia with intel that was highly classified. Like most other allegations against him, he’s quick to reduce such claims as bogus.
Then there’s the suspicion surrounding the firing of former FBI Director James Comey, a number of White House staff have attempted to protect Trump’s decision with the President himself contradicting earlier statements he made about Comey. At first, it was because he wasn’t doing a good job, and then, Comey came forward announcing the President had asked him to drop the case against his ties with Russia.
US Dollar weakness to continue?
Pound to US Dollar exchange rates have broken the 1.30 barrier and given that this scandal is unlikely to fade any time soon, further advancements for GBP/USD are a likely possibility given the lack of economic data due for release today and Monday.
Markets continue to lose faith in the President and with so much scandalous activity surrounding his campaign, his ability to follow through with campaign promises has been made considerably harder.
The other factor that needs to be considered is whether the FED will continue to raise interest rates throughout 2017. Although a separate entity from Government Janet Yellen must still weigh up the risks involved in a nervous stock market and a US Dollar which continues to lose ground as the story unravels. The Trump rally looks over and the US Dollar looks set to carry the burden.