Dollar touches 7-week low on worry over U.S. protectionism

Dollar touches 7-week low on worry over U.S. protectionism

26 January 2017, 12:23
Josephine Kreus
The dollar slumped to seven-week lows on Thursday, pressured by investors' concerns about U.S. protectionism after President Donald Trump gave the go-ahead to construction of a U.S.-Mexican border wall and prepared to impose some immigration curbs.

The dollar index, which tracks the greenback against a basket of major currencies, was last down 0.1 percent at 99.886. It dipped to 99.793 earlier in the day, its lowest level since Dec. 8.

The dollar was generally weaker despite a rally on Wall Street, where the Dow Jones Industrial Average closed atop the 20,000 mark for the first time. [.N]

Trump has made several business-friendly decisions since taking office on Friday, including signing executive orders to reduce regulatory burdens on domestic manufacturers and clearing the way for the construction of two oil pipelines.

However, the president's broad but divisive plans to reshape U.S. immigration and national security policy rattled some investors, partly because the U.S. needs foreign capital to finance its large current account deficit.

Trump on Wednesday ordered construction of a U.S.-Mexican border wall and punishment for cities shielding illegal immigrants, and he also mulled restoring a CIA secret detention programme.

"Amid concerns over Trump's protectionism, the correlation between U.S. Treasury yields and the dollar has gotten weaker," said Junya Tanase, chief currency strategist at JPMorgan Chase Bank. [Read more... ] By Yuzuha Oka | TOKYO

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