TEHRAN, August 21 -Critical comments by U.S. President Donald Trump about the country’s central bank saw the dollar fall for the fourth straight day in its worst spell since March, boosting emerging market stocks and currencies in the process.
TEHRAN, Young Journalists Club (YJC) -Critical comments by U.S. President Donald Trump about the country’s central bank saw the dollar fall for the fourth straight day in its worst spell since March, boosting emerging market stocks and currencies in the process.
In an exclusive interview with Reuters, Trump said late on Monday he was “not thrilled” with the Federal Reserve under his own appointee, Chairman Jerome Powell, for raising interest rates, and said the Fed should do more to help him to boost the economy.
American presidents have rarely criticized the Fed in recent decades because its independence has been seen as important for economic stability.
“The Fed is independent in setting monetary policy and markets were spooked by yet another comment from Donald Trump criticizing higher interest rates,” said Artjom Hatsaturjants, an analyst at Accendo Markets.
The dollar index .DXY, which tracks performance against a basket of six major currencies, fell 0.39 percent on Tuesday.
It has now fallen 1.2 percent in the last four days, its worst such run since late March.
EMERGING RELIEF
The dollar’s weakness took pressure off many emerging markets, which have struggled in recent weeks as worries over Turkey precipitated a sell-off across the globe.
MSCI’s benchmark emerging equities index .MSCIEF rose 1 percent and was set for a third day of gains after Trump’s comments.
Chinese mainland shares .CSI300 jumped 1.8 percent, South Korea .KS11 1 percent and Indonesia .JKSE 0.9 percent. In Europe, Turkish stocks .XU100 rose 1.6 percent and Polish shares 0.8 .WIG20 percent.
The Chinese yuan rose by 0.17 percent to 6.8427 per dollar. The currency was on track for its fourth session of gains, pulling further away from 6.934, its weakest since January 2017 marked last week.
The yuan had weakened to a 19-month low against the dollar earlier this month amid concerns over the country’s economic growth, a Sino-U.S. trade war and a broad rally by the dollar.
In his Reuters interview, Trump also accused China of manipulating its currency and said there was little hope of progress in the ongoing trade dispute between the two countries in talks due this week.
Other emerging-market currencies, including the South African rand ZAR=, Thai baht THB=, Mexican peso MXN=, Hungarian forint HUF= and Polish zloty PLN= were all higher by 0.2 to 0.9 percent against the dollar.
Source: Reuters
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