The US Dollar continues to struggle for traction in Asian trading and has just logged its worst January in 30 years on growing concerns that the US government is about to reconsider a “strong dollar” policy. The US Dollar Index, which FX traders use to gauge the dollar’s relative weight, slid 2.6% in January, a decline not seen in 20 years. Yesterday, a Trump advisor’s rhetoric regarding a “grossly undervalued” Euro sent the common currency on a higher path for the first time in nearly 2 months, which itself sent the Dollar index to a 7-week low with about a 1% loss.
As reported at 10:31 am (GMT) in London, the EUR/USD was trading at $1.0787, down 0.10% and well off the $1.0804 struck after the Trump rhetoric. The GBP/USD was up 0.19% to trade at $1.2599; earlier the pair had hit a high of $1.2620 while the low was set at $1.2545.
Trump Dollar Policy Questioned
Tempering the concerns investors may have about the dollar as it relates to the US president is the expectations of the Federal Reserve. For the most part, analysts expect the Fed to hold rates steady even as the members of the Federal Open Market Committee attempt to make sense of President Trump’s economic policies. Expectations were high that Trump would push for policies that promoted growth and spending that would help push inflation higher.