The U.S. dollar continued its decline during Thursday’s Asian trading session, falling against its primary trading partners and sending the dollar index down 0.38 percent to 88.90 .DXY. The decline came on the heels of Treasury Secretary Steven Mnuchin’s comments in Davos on Wednesday when he welcomed a weaker dollar. “Obviously a weaker dollar is good for us as it relates to trade and opportunities,” Mnuchin said. Nevertheless, traders and analysts remained concerned about President Trump’s seemingly protectionist policies and his open desires to withdraw from NAFTA and to toughen U.S. foreign investment rules which would make it difficult for external companies, specifically Chinese companies, to purchase U.S. companies.
On Wednesday the White House announced its support of proposed bills aimed at tightening foreign investment procedures, which the White House said “would achieve the twin aims of protecting national security and preserving the longstanding United States open investment policy.” The Senate Banking Committee will hold a hearing about the topic later today. On Friday, President Trump will be addressing the Davos summit where he is expected to reinforce his protectionist views, despite calls from global leaders to support globalization and international cooperation.
The dollar retreated to 10.82 yen as of 2:23 pm. HK/SIN, a 0.36 percent decline. The dollar was trading at $1.2451 against the euro, hitting highs not seen since December 2014 in advance of the European Central Bank’s policy meeting later today.
The lower dollar has also sent commodity prices soaring, with gold passing a 1 ½ year peak, trading at $1.364 per ounce in Asia’s mid-afternoon, up 0.57 percent. Oil prices were also higher, with Brent crude futures trading once again over the $70 at $70.96 per barrel, and U.S. WTI futures up 0.98 percent to $66.25 per barrel.