During yesterday’s New York session, President Trump did an interview with Fox News in which he said a couple of things that the market took notice of, in addition to the generally increasing level of geopolitical tension regarding Russia, Syria, Iran and North Korea, with the issue of North Korea coming to the fore as we approach the weekend – but that’s another story. The President stated that the U.S. Dollar was too strong, and it fell immediately. He also implied that he was not keen on renewing Janet Yellen’s position as the Chair of the Federal Reserve when it falls due for renewal next year, although he also stated, “she’s not toast”. The President’s exact words were “I do like a low-interest rate policy, I must be honest with you…” which seems interesting in combination with his earlier remarks, almost as if he is trying to influence Janet Yellen’s policy on interest rates with a threat on her job. Of course, the lower interest rates can remain relatively low, the more jobs can be created and the more the stock market will rise, and the President obviously is in great political need of being able to point to concrete progress on the jobs front. The disappointing Non-Farm Payrolls headline number earlier this month may have influenced him into taking this statement.
The Dollar fell most strongly against the Australian and New Zealand Dollars, but I think if the President has added fuel to trend against the U.S. Dollar, it is going to be best expressed by long trades in spot Silver and Gold (both of which are in 3 month and 6 month bullish trends), as well as a short trade in USD/JPY (this pair has been falling very steadily over the past few months, and continues to make new multi-month low prices).
