Dollar Correction
The infamous grab, hold, pull repeat handshake of President Trump almost sent several tumbling down during his inauguration at the US Capitol yesterday. Meanwhile, the actions and rhetoric surrounding his inauguration categorically did send the US Dollar lower following weeks of strong appreciation. Volatility had been expected moving into Trump’s inauguration yesterday. Whilst commentary flickered between branding outgoing President Biden’s plethora of pardons down to a tyrannical incoming Republican versus guilt, executive orders were being signed.
Those orders declared national emergencies in the areas of national security and energy. Translated from Trump to English that means enabling more natural resource extraction within the USA and enabling it to be sold domestically. Social security means addressing current and prior immigration trends particularly from the south. Despite a lot of words, nothing tangible was offered in terms of trade. The establishment of an external revenue body hints at future tariffs but nothing of the common external tariff that Trump’s election campaign pledged.
News flow during the day prompted USD selling. The Dollar’s correction lower was encouraged by existing market positioning and valuations. Headlines suggested talk of tariffs and trade would not proceed as vociferously as other items on Trump’s agenda prompting a risk-on rally to the detriment of the US Dollar. Implied and realised volatility remain high with markets wary of Trump’s initial moves. There is the potential for an extension of yesterday’s USD correction during today’s session as US markets reopen following a bank holiday.
Discussion and Analysis by Charles Porter
Related Insights
Daily Brief – British pound
Humphrey Percy
Fri 13 Jun 2025
British pound Sterling finds itself in the limelight and trading at its recent highs as somewhat improbably a couple of bolder market commentators have suggested the UK will benefit as a result of the disaffection with the USA and the USD at present. Those commentators have obviously not been following the commentary about UK Chancellor […]
Daily Brief – Oil Supply
Humphrey Percy
Mon 16 Jun 2025
Oil Supply With Friday’s rocketing up in the oil price of 12% to $78, the question is whether that is it and we have just seen a re-set or whether this is the first staging post in a much larger increase. That, of course, depends on the unfolding Israel-Iran attacks and whether that conflict spreads […]
Daily Brief – EU Inflation
Humphrey Percy
Wed 4 Jun 2025
EU Inflation Paving the way for a 25bp rate cut tomorrow, EU inflation came in at 1.9% on the back of uncertainty, lack of consumer confidence and people sitting on their cash. So overall good on inflation but a sign of less good things in the EU. As ever, the overall inflation figure had some […]
