The US Dollar ended lower after what was yet another week of high political and economic drama. Say what you will about the Trump Presidency, it’s never dull… The US Dollar’s index against a basket of major currencies opened the week around 89.80. If fell half a point on Monday, rallied back to 90.00 for the first time in three weeks on Tuesday then tumbled almost a full point to a low on Thursday morning of 89.05. A near-half point rally was then entirely reversed on Friday and having reached a low of 89.00, it ended only a few pips above this level.
The Dow Jones Industrial average was down 500 points intra-day on Monday as more than $100bn was wiped off the value of technology shares. It ended the day down 330 at 24,610. Tuesday brought a 100-point gain and Wednesday a 100-point loss. On Thursday President Trump announced the US Trade Representative’s “Section 301” investigation into alleged misappropriation of US intellectual property by China and the DJIA fell 325 points, followed by a further 420 points loss on Friday. Overall, it was the worst weekly performance by the stock market since January 2016 with the DJIA at a four-month low. The picture is just as bad for the S&P 500 Index which fell six per cent on the week. Indeed, the S&P 500 has closed lower than the midpoint of its daily range for 10 straight days, the longest stretch since at least 1982. The index closed on Friday at 2,588.26, hovering just above its 200-day moving average and its decline since March 9th was its third dip of at least 5 percent in the past two months.
In the period since his election victory in November 2006 to the stock market peak in early February, President Trump tweeted about it more than 60 times, often appearing to take credit for it. The POTUS Twitter feed has been noticeable quiet since then. The last tweet on the market came shortly after the fall in early February, warning investors they were making a “big mistake” for selling stocks despite “good news” about the economy. As at Friday’s close, the market was still just above the February low. The futures market this morning in Asia will be watched very carefully to see if this turns out to be another ‘Black Monday’ or whether there is any investor interest to buy this latest dip. The USD index opens in Asia this morning having closed on Friday at 89.05.