Thread: Dollar drops as Trump's latest crisis alarms investors

Dollar drops as Trump's latest crisis alarms investors

by Jethro Mullen and Matt Egan
May 17, 2017: 1:47 AM ET

The dollar has taken a hit from the latest political bombshell about President Trump.

The greenback fell against other major currencies in the aftermath of allegations that Trump in February asked James Comey to end the FBI's investigation into former national security adviser Michael Flynn.

The stunning reports -- denied by the White House -- deepened the political turmoil engulfing Trump's White House and intensified concerns among investors about the president's ability to push through his big economic plans.

"The inflammable allegations have spooked both currency and equity markets," said Stephen Innes, a senior trader at online broker Oanda. "Foreign exchange dealers are in flat out sell the dollar mode."

The U.S. currency dropped as much as 0.7% against the Japanese yen in morning trading in Asia on Wednesday. It also slipped as much as 0.3% against the euro.

Stock markets were also suffering, with most major indexes around Asia in negative territory. U.S. stock futures were down about 0.6%.

The dollar's decline followed an ugly trading session in the U.S. on Tuesday. The dollar index, which measures the greenback against a basket of rival currencies, dropped to territory unseen since just after Trump's election in early November.

Some market analysts warned that Trump's troubles -- along with disappointing U.S. economic data and better news from Europe -- were already hurting the dollar. And that was before the dramatic revelations about Comey and Trump broke.

Concerns grew after U.S. Rep. Jason Chaffetz, chairman of the House Oversight and Government Reform Committee, responded to the news by asking the FBI to handover "all memoranda, notes, summaries and recordings referring or relating to any communications" between Comey and Trump.

"The more momentum the allegations and investigation gather, the less confidence investors have in the administration's ability to focus on anything else, such as reviving the economy," said Matt Simpson, a senior analyst at ThinkMarkets.

Trump's economic proposals -- slashing taxes, cutting regulation and pumping up infrastructure spending -- lifted the US dollar after the election because many thought they could give the American economy a shot in the arm.

But some market watchers have expressed skepticism about how much the political turbulence at the White House is affecting the dollar.

"Trump's new soap opera story," isn't a main driver for the dollar, Peter Boockvar, chief market analyst at The Lindsey Group, wrote in a report that was published before the Comey news broke.

Boockvar said he believes the greenback has come under pressure from shifts in the global economy and central bank policy.

CNNMoney (Hong Kong) First published May 17, 2017: 1:41 AM ET

http://money.cnn.com/2017/05/17/inve...comey-markets/

For the FBI to be the key player in this sham against our "democracy" will cost the FBI its already very shaky reputation for a very very long time. The FBI is no more "independent" than our military. The FBI is an agency of the US Department of Justice answerable to the President of the United States. You do not operate out there on your own. Your check and balance is your boss, the same boss as the employees of any other agency within any other Department of the United States Government, and that is the President of the United States, Donald J Trump.

So it's damn time someone straightens you all out on this.

Originally Posted by Judy

Dollar drops as Trump's latest crisis alarms investors

Judy,

There is an error in your title. It should read "The Federal Reserve Note drops as Trump's latest crisis alarms investors."



The fact is, the dollar is in fact increasing in value as compared to a Federal Reserve Note.


Federal Reserve Notes are used by a dishonest banking system and folks in government to plunder real material wealth created by America's labor and businesses.


JWK




"Of all the contrivances for cheating the laboring class of mankind, none have been more effectual than that which deludes them with paper money. This is the most effectual of inventions to fertilize the rich man's field by the sweat of the poor man's brow."_____ Daniel Webster.

From House of Representatives Press Conference this morning, the House Ways and Means Committee has a big hearing tomorrow on the tax reform bill. I hope the Senate can get its job done and pass the health care bill and the bill to repeal McCarran-Ferguson to "erase the lines".

Trump-Comey Turmoil Socks Wall Street, Stocks See Worst Day in Eight Months

By Victoria Craig Published May 17, 2017 Markets




United States President Donald Trump speaks with President of Russia, Vladimir Putin on the telephone in the Oval Office


Investors shook off their weeks-long calm façade Wednesday, sending U.S. stocks sharply lower as investors doubted the viability of President Donald Trump’s fiscal policy follow through while controversy continued to swirl around the White House.

Losses on Wall Street steepened in afternoon action as NYSE composite volume spiked 2% above its one-month average. As of 2:42 p.m. ET, the Dow Jones Industrial Average shed 335 points, or 1.50% to 20664, while the broader S&P 500 declined 35 points, or 1.49% to 2365. The tech-heavy Nasdaq Composite shed 107 points, or 1.91% to 5615.

Sparking the selloff was a New York Times report that claimed President Donald Trump asked former FBI Director James Comey to drop a probe into former national security adviser Michael Flynn. Sources close to Comey told Fox News on Wednesday that the NYT reporting is accurate. The White House has denied the report.

The S&P 500 industry sectors that had rallied in the months following Trump’s election, thanks to the promises of the pro-business president’s agenda, saw strong selling pressure on Wednesday. The financial sector dropped 3% as shares of America’s biggest banks declined on fears that the planned tax reform agenda could be delayed. Goldman Sachs (GS) and JPMorgan (JPM) were among the Dow’s top five decliners on the session along with Apple (AAPL), Boeing (BA), and 3M (MMM).

Meanwhile, industrials, technology and materials all declined more than 2%.

As investors ditched risk assets, they rushed into traditionally safe-haven investments like gold and government debt. Gold prices rallied 1.82% to $1,257 a troy ounce, its biggest gain since June, while the yield on the benchmark 10-year U.S. Treasury note declined 0.104 percentage point to 2.221%. Yields move in the opposite direction of prices.

Meanwhile, the U.S. dollar has erased all of its post-election gains, while the CBOE’s VIX index – Wall Street’s so-called fear gauge – jumped above 15.33 its highest level since September. It had been trading around 9 in recent weeks, touching a 10-year low last week, as forward-looking investors didn’t see heightened market risk on the horizon.

“Fresh bad news for the White House emerges daily now, and it may finally be having something of an impact on Wall Street,” said IG chief market analyst Chris Beauchamp who said it’s still too early to predict the president’s “demise” just yet.

“His election campaign always seemed one day away from disaster and his presidency thus far has been remarkably similar. But the campaign won out, and in the end, it would be unwise to assume that impeachment is a given now,” Beauchamp said, warning that although bearish sentiment may seem to be taking Wall Street by the horns, investors should be cautious about getting out the market in too big of a hurry.

Indeed, while the so-called Trump trade begins to unwind, some investors, including Rhino Trading Partners Chief Strategist Michael Block, will be looking for opportunity. He said the industrials and financial sectors, both of which saw a bump on Trump’s election, could be good buying opportunities long-term.

While political uncertainty is on the rise as the White House comes under intense scrutiny in the wake of the ongoing fallout from Trump’s decision to fire Comey and fallout from Trump’s possible disclosure of classified information to Russia’s foreign minister about a planned Islamic State operation, Evercore ISI managing director Dennis DeBusschere said as long as financial conditions remain easy, significant near-term market risk should be limited.

“Krishna [Guha, Evercore’s head of global policy and central bank strategy] does not believe Trump uncertainty will change the Fed’s reaction function.

Two more rate hikes and an announcement of balance-sheet roll off remain likely in 2017,” he said

http://www.foxbusiness.com/markets/2...ht-months.html