Fundamental Comment

Dollar resumes plunge after Trump’s relief

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The U.S. dollar index, which tracks the green currency’s movements versus a basket of major currencies, dipped again on Friday after founding some relief the previous session from President Donald Trump’s hawkish remarks.

The dollar index slipped 0.59 percent to 88.87, the lowest level in three years, set for its sixth straight weekly decline.

The previous session, the green currency managed to reverse its earlier losses as it rebounded from a bottom of 88.45 to close at 89.46.

The dollar found some support after Trump said that he ultimately wanted the U.S. currency to be strong.

His remarks came one day after Steven Mnuchin, US Treasury secretary hailed the trade benefits stemming from a weak dollar.

The euro resumed its rise to $1.2455 after hitting a peak of $1.2493, continuing the bullish trend that began since early November last year, shrugging off ECB President Mario Draghi’s concerns about exchange rate.

“Several members [of the ECB governing council] expressed concern,” Draghi said yesterday. “The concern was broader than simply the exchange rate, it was about the overall status of international relations right now.”

Against the pound, the dollar tumbled to take the GBPUSD pair up to 1.4259 after a report showing a better than forecast growth in Britain.

The U.K. expanded 0.5 percent in the fourth quarter last year, following a 0.4 percent growth the previous three months, surpassing projections of 0.4 percent expansion.

This week, worries of trade war between the U.S. and China reignited after Trump imposed a 30 percent tariffs on washing machines and solar panels made outside the United States.

Mnuchin’s notes in Davos added more pressure on the greenback, while Trump’s hawkish remarks proved to be short-lived.

Later in the day, the U.S. will release its advanced fourth-quarter GDP and durable goods for December.

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