US Dollar in Trump’s 100 Days

Ngebray.com,-  The strength of the US dollar gives us interesting insight into President Trump’s economic impact during his first 100 days in office. On Election Day,  the US Dollar Index was slightly down for the year. But after Trump’s surprise victory and a surprisingly tame victory speech, the dollar surged to levels we hadn’t seen in more than a decade. He sounded kind of old school business friendly Republican. That was the initial lift off of expectations.

Picture from politicalgarbagechute.com

After ending 2016 strong, the green back started to pull back and inauguration day marked the beginning of a rollercoaster ride for America’s currency. The dollar actually slid as Trump spoke for the first time as President. And it weakened further after Trump kicked off his term by fighting with Mexico’s President, and imposing a controversial travel ban that plunged the nation into chaos.

Moving into February, Trump struck a more business friendly tone, he signed an executive order to begin scaling back financial regulations and he played nice with foreign leaders, notably Prime Minister Shinzo Abe of Japan. David Zervos, a Jefferies Chief Market Strategist said, “Embracing protectionism is not a good story for the dollar. Any time he’s with a foreign leader and he’s chummy and happy, alike it’s a nice juxtaposition to the rhetoric which was these guys are all bad guys.”

Trump’s pro business cabinet members also won confirmation, an encouraging sign to investors. But in March, the GOP began it’s messy fight over healthcare. One week after Republican leaders introduced the American Healthcare Act, the congressional budget office gave the plan a disappointing score. The dollar slide and on March 24th, Republicans pulled the bill moments before a scheduled vote, a stunning admission of defeat. The legislative failure sent the dollar to it’s lowest level since the election.

Picture from schroders.com

At the end of March, the UK triggered its exit from the European Union, moving the dollar higher. But on April 12th, Trump told that he thought the dollar was getting too strong. An unprecedented comment for a modern day President. Despite the administrations attempt to move the needle on tax reform before Trump’s 100 day, the dollar barely budged.

Then, at the end of Trump’s first 100 days, without any signature legislative accomplishment, the US dollar is much lower than its post-election high. David Zervos added, “The extent of this move is gonna be back to the highs as in January, these won’t be new cycle highs. I believe that we will get some fiscal stimulus that will be helpful for the dollar. A lot of things left to prove. And a lot of pieces in that equation that people don’t feel comfortable valuing yet.”