President Donald Trump was again the catalyst for volatility in the market, single-handedly forcing the US Dollar Index (DXY) lower. His comments and tweets were vast and varied in their targets, ranging from foreign rivals, allies, and even domestic institutions. Ultimately the DXY Dollar Index shed 0.7% to open this morning at 94.48, extending its’ losses to 1.25% lower than the year to date high of 95.65.
The barrage began initially with President Trump again accusing China and the EU of manipulating their currency and interest rates lower, further aggravating tenuous global relations. The Tweet continued to also include the independent Federal Reserve, with Trump highlighting their role in the stronger Greenback and noting “…the U.S. is raising rates while the dollars gets stronger and stronger with each passing day - taking away our big competitive edge.” The market took the news poorly for the USD and immediately began to fall against its counterparts. Punters can clearly see that Trump prefers a lower US Dollar but the Federal Reserve is an independent body with their mandate and is unlikely to be swayed from their tightening plans. Nevertheless, the market entered another period of volatility. Closing out a busy Friday for the President was his comments to CNBC outlining his willingness to “go to 500”, in reference to the on-going trade war with China.
Attention this morning turns to existing home sales in the US released at 10 am. Later this week and the most significant economic data coming from the US on Friday with annualized GDP for Q2 expected at 4%.