USD Continues to Remain Soft Against The G10 Trading Pairs

Trump’s currency comments weigh on US dollar outlook heavily. The US president tweeted on Monday that “Russia and China are playing the currency devaluation game”. “Not acceptable!” he added.

Mr Trump’s remarks raised quite a few eyebrows among currencies strategists, not least given that China’s currency, has in fact risen 3.6% this year on the dollar, after a 6.8% jump in 2017, according to Reuters data.

Trump’s behaviour is somewhat understandable. Since Trump took office in January 2017, the dollar has weakened substantially against most currencies, including the Chinese yuan and, until the United States imposed sanctions on Russia in the last few weeks, the ruble. Mr Trump is indeed correct that the rouble has been falling heavily lately. However, that is largely a response to new US sanctions on Russia, sparked by Russian support for the Syrian regime. True, the rouble is off 6.5% on the year. But Russia’s currency was down a milder 2.2% before the announcement earlier this month of US sanctions against the country.

While Mr Trump’s comments “make no sense”, they still had an impact on the foreign exchange market. The dollar index, a measure of the buck against half a dozen peers, is down 3% for the year, and has tumbled 11.3% since Mr Trump’s inauguration in January 2017, according to Investing.com data.