The dollar kept on slipping in Asia on Wednesday morning as another resignation from Trump’s White House bolstered the pro-tariff forces and hurt the investors’ confidence in the greenback.
The greenback and equities took a step back after U.S. President Donald Trump said he would push ahead with punitive tariffs on imports, resuscitating fears of a potential trade war.
Currently, the dollar index that tracks the greenback against the basket of six major currencies slipped 0.07 percent to 89.50. The dollar has been bearish since Trump’s tough tariff plan last week and the decline has extended to this week, with no sign of picking up.
The softer dollar supported the appreciation of the yen, with USD/JPY pair sliding 0.44 percent to 105.67.
The safe-haven currency gained ground as signals were mixed whether Trump would translate his tariff plans into policy. Eyes will be on Japan’s Q4 GDP data that are due tomorrow morning.
Meanwhile, the AUD/USD pair traded 0.36 percent lower at 0.7801. The Aussie stayed soft on Reserve Bank of Australia’s dovish monetary policy that is holding the rates well into 2019.
Australia's GDP growth of the fourth quarter in 2017 missed forecast of 0.5 percent quarter-on-quarter to come at 0.4 percent instead.
Trump’s Economic Advisor Resignation
Gary Cohn, Trump’s top economic advisors, is leaving the administration due to disputes over the president’s tariff plan.
The White House also said it was considering to impose wider curbs on China and clamp down on Chinese investments in the US.
Investors suspected Trump’s protectionism may result in a weaker dollar that arouses exports and high tariffs that control imports. With that, fears of a global trade war revived.
Last Thursday, Trump had said a plan for tariffs of 25 percent of steel imports and 10 percent on aluminum products would be formally announced this week.
Traders fear the departure of Cohn, a former Wall Street banker, would support protectionist forces in the U.S. administration as Trump tries to impose hefty tariffs.
Cohn’s resignation also balances pressure from recovering risk appetites that followed Tuesday’s news of North and South Korea holding their first summit in over a decade, and that came after the South said the North expressed willingness to discuss denuclearization with the United States.
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