US Politics Lead to Awful Week for Dollar

The US dollar has ended the week as the weakest major currency as controversies surrounding US President Donald Trump erased the appeal of the currency to investors, driving the greenback to the lowest level since he became a president.

During the presidential elections, Trump made many ambitious promises, like extensive tax cuts, that were well-liked by markets. Yet all the controversies surrounding the President made market participants question his ability to fulfill his promises. Moreover, now it is unclear if the Federal Reserve will be able to carry out the plan for three interest rate hikes in total this year.

The euro, on the other hand, was very strong thanks to domestic politics. The victory of Emmanuel Macron in the French Presidential race eased concerns that anti-EU forces may come to power, and the victory of Angela Merkel’s party in the regional elections damped fears further.

EUR/USD rallied as much as 2.5% from 1.0930 to 1.1206. GBP/USD jumped 1.2% from 1.2880 to 1.3030. USD/JPY dropped 1.7% from 113.15 to 111.22, reaching the weekly low of 110.23.

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