The U.S. dollar hit its lowest level in five weeks against a basket of major currencies on Thursday and was on course for its worst week since November, hit by a loss of confidence in the U.S. reflation trade a day after a news conference by U.S. President-elect Donald Trump.
Speculators had driven the dollar index, which measures the greenback against a basket of six major currencies, to a one-week high Wednesday in anticipation that Trump’s first news conference since his Nov. 8 victory would give more detail on new fiscal spending and tax measures to repatriate U.S. corporate capital held overseas.
Instead, the event was dominated by debate over Russian hacking and unsubstantiated claims that he had been caught in a compromising position in Moscow. The dollar index tumbled to 100.720 Thursday after touching, its weakest since Dec. 8 after touching 102.950 before the news conference Wednesday. urn:newsml:reuters.com:*:nL1N1F10JA
“Mr. Trump disappointed in not providing deeper details on his policy platform,” said Joe Manimbo, senior market analyst with Western Union Business Solutions in Washington.
The dollar index had gained 4 percent between Trump’s election victory and Wednesday on expectations that his promised policies would boost inflation and encourage the Federal Reserve to raise interest rates. The index is on track to fall 1.3 percent this week to mark its worst week since that ended Nov. 4.
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