The dollar fell against the yen on Tuesday, as the Japanese currency was boosted by its safe-haven status, as appetite for risk curbed by U.S. President Donald Trump's hardening defence over his immigration policies.
The US Dollar struggled to close in the positive last Friday, after a softer than expected US GDP reading for the 4th Quarter that was now confirmed at 1.9%. We also had durable goods orders for December which continued to contract despite expectations for an expansion. Risks of slower economic growth and concerns over Trump’s trade policies left its toll on US treasury Yields as well.
The dollar edged up on Friday, bouncing back from a seven-week low on optimism over the U.S. economic outlook and corporate earnings. Meanwhile the Mexican peso plunged after the White House floated the idea of a 20 percent tax on Mexican goods to pay for a border wall.
The US Dollar continues within its swift descent today as well, as the first few days for Trump and the executive orders he has given, despite being business oriented have in some way also helped to fuel worries of US protectionism and its impact on global trade. The US Dollar Index (DXY), measuring the strength of the USD against a basket of other major currencies, enters today its 2nd day of consecutive losses and is currently at 7-week lows. The DXY is currently trading at 99.86 and has already made session lows of 99.79 this morning.
The dollar held on to its gains early on Wednesday, as a rebound in Treasury yields helped the greenback bounce back from recent lows hit against the yen and euro amid concerns about U.S. President Donald Trump's protectionist stance.