A massive selloff in the US dollar continues. The American currency plummeted to nearly a 1-year low against other majors, being left without any support. The greenback is losing momentum against the single European currency.
The euro-dollar pair surged to 1.157, hitting the highest level since May 2016. Experts contribute this rise to intensifying concerns over the implementation of Trump’s reforms. Just recently, the Republicans failed to win the votes which are necessary for abandoning the Obamacare system – the very same system that Trump wants to get rid of. Now, other promises of the American President may also encounter some obstacles in Congress. Furthermore, the US dollar was badly dented by a fall in import and export prices. With the prices decreasing for several months in a row, market participants doubt that the inflation will pick up in the nearest term regardless of Trump’s commitments. Weak inflation, in its turn, can prevent the Federal Reserve from hiking the rates which will also put the US dollar under pressure.
Speaking before the US Congress, Fed Chairperson Janet Yellen said that the bank closely monitors the situation and stands ready to adjust the monetary policy if the inflation fails to reach the target level.
