Donald Trump’s greatest strength/weakness is that he is not (was not) a politician. As a businessman Trump claims to “live for the deal” and has projected a deal-closing persona that resonated with enough of the electorate to get him into the White House. A significant part of his electoral platform was a pledge to see the Affordable Care Act (also more popularly known as Obamacare) repealed and replaced with a “great, new” healthcare policy.
On Friday, matters were heading towards a showdown, not with the Democrats who now are the opposition party and a minority in both the Senate and the House of Representatives, but with his own party. The President wanted his Republican Party to line up beside his American Health Care Act (naturally dubbed “Trumpcare”) and back it, but in the event enough Republicans were unwilling to support it (for diametrically opposed reasons) for it to pass the vote in the House of Representatives that the bill was withdrawn rather than face an even more humiliating defeat. This means that Obamacare will remain on the statutes for the foreseeable future.
Investors took the news badly with both markets and the Dollar falling. The reason for this is that the ability of “the dealmaker” to close political deals is now in significant doubt. Trump tried to blame the debacle on the Democrats, of course, but investors are a savvy bunch. Markets had been buoyed at the prospect that Trump would be able to deliver on a raft of tax reforms which were seen as being business friendly. The falls in the currency and on markets reflect growing doubt that this will indeed be the case. Also, Trump’s associates (if not the President directly) continue to be embroiled in revelations about links with Russia which may have affected the election. Together with Trump’s inability to get a travel ban on seven predominantly Muslim states to stick, investors are beginning to question his “deal making” credentials when applied to the world of politics.
The Dollar has fallen from a March high against the Yen of 115.4 to a current level of 110.7; and this is despite the decision of the Federal Reserve to raise interest rates earlier in the month.