Despite confidence that President-elect Donald Trump’s news conference on Wednesday would send the dollar higher, his words had a converse effect, sending the greenback broadly lower after a notable rally prior to the conference.
Instead of answering questions directly, Trump skirted issues or ignored them entirely, failing to mention his proposed tariff against Chinese exports and offering no details about his tax cuts or proposed infrastructure spending, two major points that had been fueling the dollar’s rise in recent weeks.
The dollar index slumped 0.4 percent during Thursday’s Asian session, falling to 101.42 .DXY. The dollar fell to 114.76 against the yen and to $1.0602 against the euro, helping the common currency continue its recovery path after hitting 14-year lows last week. The pound was also helped by Trump’s conference, rising to $1.2203 from its recent 10-week low of $1.2048. One of the few currencies that fell against the dollar after Trump’s speech was the Mexican peso which hit record lows of 22.040 pesos to the dollar on Wednesday after Trump commented that Mexicans would pay for his border wall one way or another.
Oil Prices Keep Wavering
Oil prices struggled to keep their gains from earlier this week after the U.S. Energy Information Administration announced on Wednesday afternoon that inventories unexpectedly rose by 4.1 million barrels to 483.11 million barrels. On the other hand, information is already starting to emerge about Saudi Arabia’s production cuts which are expected to be focused towards Europe and the U.S. in order to protect the country’s largest Asian customers.
Analysts have been quick to note that the OPEC deal requires countries to curb production, but does not limit any nation’s exports, which may be a sign that supply is still plentiful enough to keep prices low despite the cuts.