Started speaking with delight and finished with a sorry sight. Dollar has lost almost everything it won after arrival of Donald Trump at the White House.
The investors, who believed in the promised by the 45th President of the USA stimulation of the American economy, can’t wait to the very same incentives. Election promises remain as such also after elections.
At the end of March dollar retracted against all ten leading currencies included in the Bloomberg Dollar Spot Index, stocks of the USA cheapened, but the investors were forced to focus on the eternal values - gold.
This is how the markets responded to yet another failure of the American president: he failed to make the Congress cancel the Obamacare. The republicans in the House of Representatives have withdrawn the bill because of insufficient votes in furtherance thereof. The failure with the Obamacare forced the investors doubt whether the new president can ensure the adoption of bills on the tax reforms and de-regulation of the financial sector, also to fulfil the rest points of the election plan on the acceleration of the national economy.
From all appearances “The Trump factor – rising expectations from a new economic policy – is winding down. Instead of almost blind faith in the future of the American economy headed by the President, who promised to make America great again, the investors suddenly understood that the subjective verbal messages and unbiased economic situation are different things.
Against the background of dollar sales the investors increased focus on compensation assets – gold, euro, yen and Swiss franc. The yen and franc strengthened to the maximum since the middle November last year, i.e., to its indicators as at the presidential elections in the USA. Gold appreciated in value by 1.2%, approaching to the maximum since 10th November. Currencies of the developing countries have strengthened as well.
Every sign indicates that the triggered by the Trump’s national protectionism growth of the American currency and commodity prices risk are being completely negated. The disaster with the Obamacare can become one of the last drops in the cup of investment endurance.
So, stocks of American banks, which were increasing in price to the maximum at the November victory of Trump over Hillary Clinton, in March sharply dropped in price, approaching to the minimum since June 2016. Exactly the banks, as expected, could benefit more than others from the promised by Trump de-regulation of the financial sector. But the President without necessary support in the Congress continues losing faith of the investors. One or another of them is about to cry ‘The King is naked!’