One can probably put the time of death of the Trumpflation rally as 11:47pm on Monday night. That’s when the WSJ published the latest excerpt of its Friday interview with Donald Trump, in which the president-elect himself said the dollar was already ‘too strong’and blamed this is in part due to China holding down its currency and added that ‘our companies can’t compete with them now because our currency is too strong. And it’s killing us.’
The yuan is ‘dropping like a rock,’ Mr. Trump said, dismissing recent Chinese actions to support it as done simply ‘because they don’t want us to get angry.’
As the WSJ added, Trump broke with a recent tradition of presidents refraining from comments on the dollar’s level, and more to the market’s surprise, he is now talking the dollar down, not up. The USD is up 4% against a broad basket of currencies since he was elected, and roughly 25% since mid-2014. The dollar-negative sentiment was echoed several hours later by Trump advisor Anthony Scaramucci, who told a Davos audience that “we must be careful of a rising dollar.”
This post was published at Zero Hedge on Jan 17, 2017.
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