U.S. dollar drops sharply after Trump calls it 'too strong'
- Author: Leroy Wright Apr 13, 2017,
Apr 13, 2017, 14:50
Shares slid across Asia on Thursday (April 13) after the United States dollar slumped and Treasury bond yields dropped to the lowest level this year in reaction to President Donald Trump's comments that the greenback was getting too strong and that he won't brand China a currency manipulator.
He also said: "I think our dollar is getting too strong, and partially that's my fault because people have confidence in me".
"It could also be taken as an implicit threat to other countries that if the dollar stays strong and if USA bilateral trade imbalances with its major trading balances stay high or continue to expand, that he will take some sort of action", Prasad said.
Trump, in an interview with the Wall Street Journal, also said he would not label China a currency manipulator.
"They're not currency manipulators", the president said, adding that China hasn't been manipulating its currency for months, and that he feared derailing U.S. This also marks a turnaround from his frequent criticism of Yellen during his campaign, when he said she was keeping interest rates too low.
Oil prices ended lower after reversing earlier gains due to a report on US crude stockpiles.
Earlier in the day, China abstained on a UN Security Council resolution that condemned Syrian President Bashar al-Assad instead of joining Russian Federation in vetoing the resolution as it had done in the past.
Donald Trump has said his administration will not label China a currency manipulator, rowing back on a campaign promise.
"President Xi wants to do the right thing".
Eswar Prasad, a professor of Global trade at Cornell University, said it was striking that a sitting president would comment so directly on the value of the dollar.
Trump's revised stance also reflects that China has actually been attempting to prop up its currency lately. Otherwise, we're just going to go it alone, Trump said referring to the latest telephonic conversation with the Chinese President.
And he left open the possibility of re-nominating Janet Yellen for a second four-year term as Fed chair.
He went out of his way to praise Xi, saying he was "very impressed" following a meeting between the two leaders in Florida last week.
Once again Obama fails to classify China as a currency manipulator.
"The best way to get China to cooperate with North Korea is to be tough on them with trade, which is the number one thing China's government cares about", Schumer said.
The yield on the benchmark USA 10-year Treasury note US10YT=RR was at 2.234 percent after touching 2.221 percent, its lowest in almost five months.
There are fresh concerns about the French presidential election and possible USA military action against Syria and North Korea.
"The dollar's already under pressure, so I think any excuse for further pressure is likely to bring the greenback even lower", Lien said.
China reacted with jubilance to Trump's decision to withdraw his currency manipulation charges, which experts across the world have long dismissed as outdated.