Trump's latest boost to the dollar: US-Turkey spat | The Daily Star
12:00 AM, August 17, 2018 / LAST MODIFIED: 12:00 AM, August 17, 2018

Trump's latest boost to the dollar: US-Turkey spat

US President Donald Trump has repeatedly called for a weaker US dollar in a bid to help US exporters, but his recent trade policies, including the imposition of import tariffs on some Turkish goods, have had the opposite effect of strengthening the greenback.

The dollar this week rose to a 13-month high against a basket of currencies, getting an extra boost as emerging markets have sold off on concern about contagion from Turkey and investors sought a safehaven in the US currency.

On August 10, Trump intensified the spat with Turkey over the detention in Turkey of US evangelical pastor Andrew Brunson on terrorism charges by imposing higher tariffs on metal imports. The move sent the Turkish lira to a record low against the dollar and spurred declines in other emerging market currencies.

The US dollar has risen against major currencies for several months, with the dollar index up nearly 8 percent over the last four months. On Wednesday, the index hit a fresh 13-month high.

 “In a lot of ways some of his actions have amplified this risk-off type of environment, which has ultimately helped the US dollar strengthen in the near-term,” said Charles Tomes, senior investment analyst and trader at Manulife Asset Management in Boston.

Robust US economic data this year, even as Europe and other major economies have lost some steam, has helped keep the US Federal Reserve on track to raise interest rates twice more this year, which should boost the appeal of the dollar further.

“I think the dollar is strengthening as a result of diverging monetary policies,” said Oliver Pursche, chief market strategist of Bruderman Brothers In New York.

“It's fairly clear that the Fed is almost certain to hike in September and very likely to hike in December again, whereas other central banks are maintaining a status quo.”

Stay updated on the go with The Daily Star Android & iOS News App. Click here to download it for your device.

Grameenphone and Robi:
Type START <space> BR and send SMS it to 2222

Banglalink:
Type START <space> BR and send SMS it to 2225

Leave your comments

Top News

Top News

Top