The American dollar, a household name in sovereign currencies, found itself the latest victim of Donald Trump's loose tongue Tuesday, plunging to a one-month low after the president-elect called it “too strong” compared to the Chinese yuan.
“Our companies can’t compete with them now because our currency is too strong. And it’s killing us,” he said in an interview with the Wall Street Journal. The dollar had risen more than 5 percent since the election on expectations of stronger domestic economic performance under Trump, particularly if promised tax reform and infrastructure spending plans go through. From WSJ:
The comments have forced some investors to rethink their expectations that Mr. Trump will quickly introduce fiscal stimulus and cut taxes.
“The market generally still expects these policies to come into place at some point, but whether or not they come in the next 3 months or 12 months is the question,” said Brian Daingerfield, a macro strategist at RBS Securities. Some analysts expect Mr. Trump to give more clarity on his economic plans during Friday’s inauguration. “Any indications on tax reform or infrastructure spending are going to be seen as a positive for the dollar,” said Mr. Daingerfield.
The greenback is only the latest asset to feel the heat from the president-elect, whose tweets about companies ranging from Boeing to the pharmaceutical industry have sent stock prices into tumult. The dollar could not be reached for comment Tuesday.