The Australian dollar is trading higher today against its US counterpart after worrying signs that US president Donald Trump will take a protectionist stance which may include a weaker US dollar.
At US7.44pm (GMT) the Aussie dollar was trading at US75.80c up from US75.73c in yesterday’s trading.
Fear crept into the market as investors fretted over the fact that Trump may start a global trade war in order to boost the US economy, which may cause other countries to retaliate which would put pressure on the greenback,
"All signs are pointing to a global trade war, said BK Asset Management director of foreign exchange strategy Kathy Lien.
"Investors are worried that other countries will retaliate and any headlines related to that would be negative for the US dollar." she added.
In his first days in office the US president cancelled America’s cooperation with the Trans Pacific partnership while also threatening to introduce border taxes to companies that move their operations outside the US.
This comes on top of Trump’s threat against China to introduce a tariff of up to 50 percent for imported goods as he believes that the world’s 2nd largest economy is not playing a fair game by keeping their currency artificially low,
“A void of data in EU and US left markets at the mercy of comments from Trump’s Administration,”
“Ending of current NAFTA and Trade comments, including “very major” border taxes for corporates may not be surprises but triggered further risk position unwinding.” said Imre Speizer, senior market strategist at Westpac
At US7.44pm (GMT) the Aussie dollar was trading at US75.80c up from US75.73c in yesterday’s trading.
Fear crept into the market as investors fretted over the fact that Trump may start a global trade war in order to boost the US economy, which may cause other countries to retaliate which would put pressure on the greenback,
"All signs are pointing to a global trade war, said BK Asset Management director of foreign exchange strategy Kathy Lien.
"Investors are worried that other countries will retaliate and any headlines related to that would be negative for the US dollar." she added.
In his first days in office the US president cancelled America’s cooperation with the Trans Pacific partnership while also threatening to introduce border taxes to companies that move their operations outside the US.
This comes on top of Trump’s threat against China to introduce a tariff of up to 50 percent for imported goods as he believes that the world’s 2nd largest economy is not playing a fair game by keeping their currency artificially low,
“A void of data in EU and US left markets at the mercy of comments from Trump’s Administration,”
“Ending of current NAFTA and Trade comments, including “very major” border taxes for corporates may not be surprises but triggered further risk position unwinding.” said Imre Speizer, senior market strategist at Westpac
