June 28, 2017

Trump reports weigh on global stocks and the dollar

24 May 2017, 04:31 | Archie Newman

Traders work on the floor of the New York Stock Exchange in New York U.S

Traders work on the floor of the NYSE in New York

But the retreat in the dollar, which has now given up all the gains it made following Trump's presidential election win in November, and a pull-back from record highs for world stocks underscores investor unease about this week's headlines.

Expectations for a rate increase by the Fed had eased in the wake of lackluster data on USA inflation and economic growth in recent weeks, as well as President Donald Trump's firing of FBI Director James Comey and news of possible ties between members of Trump's administration and Russian Federation.

USA stocks were poised for a lower opening with Dow futures and the broader S&P 500 futures down 0.4 percent.

On Wednesday, the dollar index went down 0.13% to 97.97.

The U.S. dollar decreased against most major currencies on Wednesday as the latest turmoil in Washington triggered market concerns on whether the Trump administration could continue to push its reform agenda.

The dollar index, which tracks the US currency against a basket of six major rivals, was last at 98.118, flat on the day. Even with Wednesday's declines, the S&P 500 stock index is up 10.2 percent since last November's US elections though.

Trump asked Comey to end the FBI investigation into ties between former White House national security advisor Michael Flynn and Russian Federation, according to a source who has seen a memo written by Comey.

Stock markets were also suffering, with most major indexes around Asia in negative territory.

"The market's key focus right now is the political uncertainty linked to the Trump allegations, not economic fundamentals", said Toshihiko Sakai, a senior dealer at Mitsubishi UFJ Trust and Banking. Swiss Franc inclined by 0.3 percent against dollar closing at 0.9828 franc-dollar and gold increased by 0.6 percent closing at $1,243.4 per ounce.

"Risk aversion is rife once again with the brewing political storm surrounding President Trump in the USA largely being blamed", said Craig Erlam, a market analyst with retail broker Oanda in London. As a result, the US Dollar has continued to feel significant pressure as investors consider the possibility that Trump won't finish out his term.

New applications for USA jobless benefits unexpectedly fell last week and the number of Americans on unemployment rolls tumbled to a 28-1/2-year low, pointing to rapidly shrinking labor market slack.

The pan-European FTSEurofirst 300 index closed down 0.89 percent at 7,436.42 ending off lows. The USD/CHF was trading at 0.98371 Swiss Francs, down 0.19% and off the session low of 0.98160 Swiss Francs.

The euro hit its highest level since November 7, while prices of gold hit a one-month high.

The 10-year U.S. Treasuries yield dipped to 2.303 percent, flirting with its lowest level in two weeks.

In commodity markets, safe-haven gold hit a two-week high, while oil prices were higher.

Switzerland's safe-haven franc hit its highest since November's US election and Britain's Brexit-bruised pound broke through the $1.30 barrier for the first time since late September after reassuring retail sales figures.

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