Dollar drops as Trump’s ‘America first’ speech unnerves traders

Currency’s losses extend after US president spurs concerns of rising trade protectionism

The dollar slid as much as 1 per cent against the yen. Photograph: Kimimasa Mayama/EPA

The dollar slid as much as 1 per cent against the yen. Photograph: Kimimasa Mayama/EPA

 

The dollar extended losses from Friday when US president Donald Trump’s inauguration speech offered scant details on his fiscal policies while emphasising an “America first” approach to foreign policy, spurring concerns of rising trade protectionism.

The greenback slid as much as 1 per cent against the yen. An Asia-based FX trader said sellers in Tokyo were getting out of stocks associated with Trump’s pro-growth stance.

The US currency slid against all its G10 peers after the Trump administration vowed on its revamped website to withdraw from the Trans-Pacific Partnership and renegotiate the North American Free Trade Agreement.

“Caution is the theme for the week as the market will be very susceptible to Trump and his team’s policy announcements,” said Rodrigo Catril, a currency strategist at National Australia Bank in Sydney. “Whether Trump achieves prosperity for America remains to be seen. From a global perspective, while his policies could result in America getting a bigger share of the pie, the pie is unlikely to become bigger if global trade declines.”

Asia

Japan’s Nikkei share average dropped more than 1 per cent on Monday as exporters fell on a stronger yen, while sentiment was subdued on concern over Mr Trump’s protectionist trade views.

The Nikkei dropped 1.3 per cent to 18,891.03. The broader Topix dropped 1.2 per cent to 1,514.63, and the JPX-Nikkei Index 400 slipped 1.3 per cent to 13,567.32. The Mothers index was up 0.2 per cent, while the Jasdaq market added 0.5 per cent. – (Bloomberg)