Greenback plunges after Trump press conference

The US dollar lost most of its post election gains on Thursday trading against multiple foreign currencies like the Japanese yen, Australian dollar, British pound and euro, heading to a five-week low. The plunge was mainly due to President-elect Donald Trump’s first news conference after the US election last November.

The Australian dollar has seen most gains from the plunge of the greenback in the recent trading, climbing 0.3% during the Thursday trade and increasing to 1.6% after Trump’s news conference. The AUD soared to as much as 74.72 US cents, which was the currency’s highest since mid-December.

“The AUD looks set to continue to test the topside after surging ahead overnight. We expect that the AUD could re-test 0.78 given it has lagged fundamentals,” stated ANZ economist.

Meanwhile, the Japanese yen also gained against the US dollar, increasing to 0.9% at ¥114.28. Yen has traded higher from ¥115.81 late Wednesday trading to Thursday’s ¥114.55 during Tokyo’s afternoon break.

Japanese market watchers expressed concern over Trump’s mention of Japan in the context of trade imbalances, which led to more selling of the greenback in the region

Sterling also took advantage of the falling dollar rates after almost reaching its three-month low of $1.2036, but rallied back to $1.2201 or 0.2% after the conference.

Greenback’s value against a basket of major currencies also fell from last week’s 14-year high and plunging to 101.85 and down by 0.2%. This, in turn, was a rally grabbed by the euro and experiencing a 0.2% increase to $1.0570.

Prior to the president-elect’s conference, analysts and investors alike were anticipating that Trump might expound on the matters of his administrative plans when he takes office on January 20. However, the conference mostly discussed topics concerning Russian spying, his business interests, Mexico, and drug pricing.

“Overall Trump did not really say anything new. As a result, we’re still in wait-and-see mode with respects to his policies,” said an economist.

Trump’s speech greatly lacked details that many investors and analysts were anticipating as a means of confirmation and assurance on his upcoming administration and term in office. Trump failed to shed light on his plan for economic stimulus, trade policy or taxes. The absence of clearer plan of action has set the greenback to fall on the following trading session.

Gold also experienced a rally from the dollar’s losses. On the COMEX division of the New York Mercantile Exchange, the precious metal’s February delivery rose 1%, or $11.10 at $1,202.35.

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