The dollar fell on Monday following Donald Trump’s inauguration speech which hinted towards protectionism, and his follow-up speech on Sunday which raised questions about America’s long-standing trade agreements, including Trump’s desire to renegotiate the North American Free Trade Agreement (NAFTA) and to withdraw from the Trans-Pacific Partnership (TPP), a 12-nation trade pact.
The dollar headed towards seven-week lows during Monday’s Asian session, down 1.1 percent to 113.435 yen. The euro also gained against the greenback, up 0.4 percent to a six-week high of $1.0746. The Mexican peso, the currency most affected by Trump’s protectionist outlook, rallied 0.6 percent on Monday morning to 21.44 per dollar, a two-week high. The currency also enjoyed a 1.7 percent gain on Friday, its biggest rise in two months.
In his speech, Trump committed to making America strong again, and he noted that the strong dollar could be damaging for businesses, hurting profits and emerging markets.
Oil Markets Also Slip
Oil markets also slipped on Monday, their first decline in three sessions, likely the result of rising U.S. production. U.S energy companies added 29 rigs last week, the highest number of rigs in four years. The country’s rig count now totals 551, the highest number since November 2015.
Brent crude, the international benchmark for oil prices, traded at $55.42 on Monday, down 7 cents from Friday’s close. U.S. WTI crude futures were down 11 cents to $53.11 per barrel. Traders have taken note that Brent cleared the resistance level of $55.43, which may signal that it will climb higher in the near future.