The US dollar gave up some gains on Tuesday and dived to a level not seen since December last year as President-elect Donald Trump pulled off his most biting remarks against the currency.
The greenback just got a taste of the president’s sour tongue
Too Strong
The US dollar index, which tracks the greenback’s performance against a basket of major currencies, closed 1.2% lower and was last trading at 100.35, the lowest peak since the early December.
On Monday, the billionaire tycoon-turned-president said on an interview that the US dollar has gone too strong and pointed out that this currency’s strength is “killing us,” which in turn marred American companies from competing against their Chinese rivals, and furthermore blamed Beijing for holding its Chinese yuan on a subpar level.
On an economic standpoint, a stronger dollar will potentially cause damage to US companies as higher buck means more expensive US products overseas.
The euro settled at its six-week high against the US dollar at 1.01 while the Japanese yen hit its best close since November at 113.
The British pound was lifted by both comments from Trump and its Prime Minister Theresa May who delivered her speech about the Brexit process, rallying as much as 3% on Tuesday session, to finish at 1.23 against the greenback.
The currency has shot up 4% in the wake of Trump’s victory over Hillary Clinton in the November 8 Election and has further surged at the end of 2016 on expectations that the upcoming Trump policy will benefit the dollar.