Yesterday, the US dollar came under selling interest after US President Donald Trump accused Russia and China for currency devaluation. In Australia, the RBA minutes were out, but as we expected, the Aussie did not respond. As for today, the highlight is likely to be the UK jobs report for February, as investors try to assess the likelihood for a May hike by the BoE.
USD Slides on US President’s Tweet; AUD Does Not Respond to the RBA Minutes
The dollar traded lower against all but two of its G10 peers on Monday. It managed to gain somewhat against NZD, while it traded virtually unchanged against AUD. The US currency lost the most against SEK, GBP and EUR in that order.
The greenback came under selling interest after US President Donald Trump accused Russia and China for currency devaluation through his twitter account. Specifically, the US President said, “Russia and China are playing the Currency Devaluation game as the U.S keeps raising interest rates”.
The statement appears very strange to us, mainly because the ruble collapsed on the back of the sanctions imposed to Russia by the US, and secondly, because the US dollar has been weakening against the Chinese yuan since January 2017. Since then, the greenback is down near 10% against its Chinese counterpart. What’s more, Trump's comments contradict the US Treasury Department semi-annual report on currencies that was released on Friday, where no country was named a currency manipulator. At this point, we have to note that Russia is not included in the report as it isn’t amongst the 12 largest US trading partners.
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