Dollar struggles to recover from losses after Trump comments

HONG KONG, China: The dollar struggled to bounce back Wednesday following another selloff fuelled by Donald Trump’s suggestion he was happy with the currency’s recent decline, while tech firms helped most equity markets extend their rally.

Traders are also keeping an eye on the Federal Reserve’s latest meeting, hoping for some guidance on its plans for interest rates amid uncertainty over the US president’s policies following his latest tariff threats.

The greenback has retreated across the board this week following reports that the New York Fed had checked in with traders about the yen’s exchange rate, which fuelled talk that US and Japanese officials were prepared to stage a joint intervention.

That led to speculation the White House was prepared to let the dollar weaken, and Trump did little to dismiss that when asked Tuesday if he was worried about the decline.

“No, I think it’s great,” he told reporters in Iowa as the unit hit its weakest level against the euro in four-and-a-half years and a two-and-half-month low against the yen. “Look at the business we’re doing. The dollar’s doing great.”

He added: “I want it to be — just seek its own level, which is the fair thing to do.”

The dollar also sank against the pound, South Korean won and Chinese yuan, with a slight bump Wednesday doing little to recover its latest losses.

Observers said unease about Trump’s latest tariff outbursts, including threats against European nations over their opposition to his Greenland grab and a warning to Canada over its trade talks with China, have also dented faith in US assets and weighed on the unit.

Meanwhile, US consumer confidence plunged to its lowest level since 2014, a survey showed, as households fret about inflation and the elevated cost of living.

Win Thin, at Bank of Nassau 1982 Ltd, said: “Foreign exchange typically is the leader in terms of showing market discomfort with a country’s policies and economic outlook, so this dollar weakness bears watching.”