By Dion Rabouin
| NEW YORK
NEW YORK The dollar edged down on Friday as investors were underwhelmed by the limited scope of executive actions and the lack of concrete policy reforms in the inauguration speech of newly sworn-in U.S. President Donald Trump.Investors had been looking to Trump's first address as president to highlight his plans for fiscal spending, tax cuts and regulatory reforms. Instead, Trump focused his remarks on his "America first" policies that were short on specific proposals."To the extent you could read into that, you might think markets were expecting something more optimistic and they heard a little bit of pessimism, a little negativity," said Chris Zaccarelli, chief investment officer at Cornerstone Financial Partners in Huntersville, North Carolina. "The market is waiting to take its cues from actual policies as opposed to potential or proposed policies."The dollar index .DXY, which tracks the greenback against six major currencies, was little moved immediately following Trump's remarks, but trudged downward as investors unpacked the speech and saw news of the executive actions.
"Trump’s speech focused on protectionism and the markets rejected the idea that protectionism is going to be the new president’s central focus because protectionism means trade wars, which is not good for the (dollar)," said Kathy Lien, managing director of BK Asset Management. The dollar index .DXY fell 0.3 percent. It has risen about 3 percent since Trump's Nov. 8 election victory, but has shed about 1.3 percent so far in January on growing concerns about Trump's protectionist rhetoric and recent comments about his dissatisfaction with the strong dollar.
Analysts also noted the protests in Washington in which about 90 people were arrested as prompting investor uncertainty.The dollar fell against the euro EUR=, Japanese yen JPY= and British pound GBP=, touching session lows against each at around 3 p.m. The dollar was lower against each currency for the week as well.
The Mexican peso briefly trimmed early gains during Trump's speech, but strengthened again after the president did not detail measures that could specifically affect Mexico. The peso rose 1.8 percent against the dollar, its largest one-day percentage gain since November. The peso has weakened significantly in the new year, touching a new all-time low of 22.03 pesos per dollar on Jan. 11. (Reporting by Dion Rabouin, additional reporting by Sinead Carew; Editing by Richard Chang and Chizu Nomiyama)
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Updated Date: Jan 21, 2017 04:00:07 IST