The US Dollar edged lower again after this past weekend’s G20 summit where talk was dominated by the protectionist policies of the US President. The majority of financial leaders at the G20 expressed their concern over the global trade relations between the US and the other members, as well as President Trump’s concern with a too strong US Dollar. As it has in the past, the post-meeting communique addressed he need to avoid intentional currency manipulation. One thing the communique did not address was the free trade issue and analysts say that that was intentional in order to avoid the US opening a dialog about how it is treated unfairly.
As reported at 9:51 am (GMT) in London, the EUR/USD was trading at $1.0507, a gain of 0.22% while the GBP/USD was up 0.18% to trade at $1.2416. The AUD/USD was also higher, at $0.7726, a gain of 0.12% while the NZD/USD was up 0.31% at $0.7038.
Doubt over Trump’s Fiscal Plans Grows
Many analysts believe that the Trump administration’s logic is to impose new tariffs and taxes on imports, in a roundabout way that would support the US Dollar. However, many US banks have recently expressed doubt over Trump’s plans, specifically a reform on border taxes, which is not likely to be upheld in the US Congress in any meaningful way. Citi was one such bank to recently end its forecast for a below parity Euro, given the Fed rate disappointment and signs that Trump’s fiscal and tax agenda are likely to be delayed as he wrangles with the healthcare debacle.