Dollar gains as Trump makes a U-turn on dollar policy
EUR/USD is down to lows for the day now and back under 1.0800, testing support from the week’s low @ 1.0785 with the support region around 1.0767-78 going to be a key one to watch ahead of the daily close today.
The latest nudge lower in the pair comes as US president Trump advocated for a stronger dollar, saying that now is “a great time” for that to happen.
Although the dollar is gaining on the policy U-turn, it is hard to imagine this as being the point where the currency will run away with major gains in the big picture.
Looking ahead, the dollar will still largely be driven by risk sentiment more than anything else as we navigate through the coronavirus crisis.
If we are going to look past that, the dollar will surely face some big obstacles – even more so that Trump is calling for negative rates on top of the host of easing policy measures that the Fed has already introduced over the past two months.
Trump may be “happy” that the dollar is holding its ground as the printers work overtime now, but you have to wonder how pleased he will be if the dollar strengthens amid a potential renewed sell-off in the US stock market.