The US dollar dropped against its major peers on Monday, the first trading day since Donald Trumpâs inauguration last Friday, as traders remained uncertain towards the presidentâs economic plans. The greenbackâs drop opened a window for the British pound to reach its strongest level in a month.
Uncertainty loomed over the US markets as investors digested the protectionist emphasis that Donald Trump used during his inauguration speech. Worries of political obscurity overshadowed expectations of improving economic growth under Trumpâs administration.
A number of protests and confrontations over the weekend added to negative sentiments, but the biggest blow came from a confirmation that the US plans to leave the Trans Pacific Partnership Agreement. Traders are concerned about the effect will Trump have on the nationâs economic growth and currency.
Four days before Trumpâs inauguration, the International Monetary Fund warned of the risks a trade war would bring to the global growth, which is already struggling to maintain momentum. IMF Chief Economist Maurice Obstfeld said that in such a scenario, all major economies will lose.
The first weeks of Trumpâs administration will be critical to the movement of the US dollar, as traders will continue to closely follow any hints the US president makes for his economic plans.
EUR/USD traded at 1.0730 as of 18:05 GMT on Monday, from 1.0751 at 6:15 GMT, the pairâs highest level since December 8. EUR/USD opened trading today at 1.0712.
GBP/USD traded at 1.2478, after touching 1.2491 at 15:50 GMT, which marks the pairâs strongest rate since December 19. GBP/USD started off the new week at 1.2381.
The Dollar Index, which measures the performance of the US currency against its major peers, dropped to 100.35 as of 17:57 GMT, from 100.74 on Friday.
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