Dollar dropped in Asian Trade on Monday after new sworn in President Donald Trump who announced plans to get implemented on a protectionist agenda.
On Sunday, Trump said that he planned to restart negotiation with Canada and Mexico over NAFTA, or North American Free Trade Agreement, that came into an effect in early 1990s. Adding to that he will pull U.S out of Trans Pacific Partnership, or TPP, that would have all created a 12 country free trade bloc.
In an Asian Trade, yen climbed, with greenback fetching little as 113.42 yen, off to an early high of 114.43 yen and below more than 115 yen garnered on Friday. Pound was up against dollar, fetching around $1.2433 at 11:03am. SIN/HK, off to an early low of $1.2352.
Dollar index, that measures greenback against basket of current dropped as low as 100.20 in the Asian Trade, off to an earlier high of 100.67, down from the levels as high around 101.50 on Friday.
Analysts pointed about Trump’s trade agenda.
Adam Reynolds,CEO, Asian Pacific,Saxo Bank told CNBC that he is thinking about to reduce trade is the dollar negative in long run. I think it is an isolationist policy which is not a good thing for dollar.
He also added that as long as dollar index remained over 100, greenback would like to remain in the uptrend.
Others also critical of the trade of Trump’s agenda that how it would impact dollar.
David Roche, Global strategist and President, Independent Strategy told CNBC ‘Squawk Box’ said that it is like a motor having two pistons, one going up and other going down. Trump definitely is one who is going down.
Roche also said that any of all these ideas like tariffs, border tax, wallop Mexico, take on Chinese, let kiss some part of Putin, he don’t want to mention television, all these things are extremely negative for dollar because people know that what they mean.
He also noted that dollar was not one way bet, either it is up or down.
A lot of such money and border tax is in a full employment of economy, while act of an economic ignoramus, are going nevertheless to boost the inflation that means, Mrs. Yellen, who is not world’s most exciting person but it is certainly not economic ignoramus, as this will be an increase in the interest rates, this will push up dollar.
Janet Yellen, Fed Chief, reiterated during last week that to keep interest rates down for long that would push the inflation up and will require U.S central bank to increase the interest rates quickly in the response.