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US dollar extends losses to five-week low after Trump's remarks
The US dollar fell in European trade on Friday against a basket of major rivals, extending losses for the second day and plumbing five-week lows, and about to mark the second weekly loss in a row on Donald Trump’s Davos remarks.
The remarks boosted hopes of a Federal Reserve interest rate cut in March as investors now await more clues on the path forward for US monetary policies.
The Index
The dollar index fell 0.75% to 107.28, the lowest since December 18, with a session-high at 108.19.
On Thursday, the index lost 0.2%, the third loss in four days following a spate of weak US data.
Weekly Trades
The dollar index is down 1.95% so far this week on track for the second weekly loss in a row.
Trump
US President Donald Trump spoke ahead of the World Economic Forum in Davos on Thursday, in words that were aggressive, alarmist, and threatening at times.
Trump spoke about tariffs, inflation, international relations, and said he’s going to push for lower rates in the US and worldwide.
He also sent a message to each company in the world, to come and build their products in the US with very low taxes.
But if they refused to shift their manufacturing to the US, he threatened heavy taxes.
US Rates
According to the Fedwatch tool, the odds of a Fed 0.25% rate cut in January stood at just 1%, and the odds of such a cut in March improved to 30%.
