For an economy that has shown signs of significant strength in recent months, it seems surprising that the US Dollar is on a path of weakness this week. The FED’ decision to raise interest rates last week should have been the start of a new era for US Dollar bulls, but instead, their less bullish outlook has weakened investor appetite for the US Dollar.
Two further hikes are projected for 2017 which is far less aggressive than markets had expected. This explains in some part the retraction seen on the Dollar since the beginning of the trading week.
Are Trump’s days numbered?
The other big culprit lies in the endless amount of controversies that are coming to light in the wake of President Trump’s victory. FBI’s James Comey testified to allegations of Russian involvement in the 2016 Presidential race. Of what little is known, a full investigation was opened last July, and the public will remain in the dark until the investigation concludes.
Why did James Comey re-open an investigation into Hillary Clinton’s hacked emails at the same time knowing that Trump’s campaign could be compromised by the Russians?
Perhaps the markets are growing increasingly nervous towards Trump’s Presidency, his meeting with Angela Merkel this week spelled further awkward moments for the newly appointed President.
Or perhaps they feel his days are numbers, if the FBI find clean evidence of Russian involvement, it could spell the end of his Presidential career prompting uncertainty for US politics.