The number of followers on US President Donald Trump’s Twitter page is increasing at an exponential rate, reaching 20.4 million this week and up from around 19.9 million just a few weeks ago. Mr. Trump’s frequent use of Twitter to communicate with the US public, and with the greater audience of the world’s citizens, without the filter of the mainstream media, is also adding a new element of volatility in the world’s financial markets. Nobody knows when the US’s Tweeter in chief will launch a Twitter tantrum that roils the Mexican peso or forces China to lift its interest rates in order to defend the value of the yuan versus the US dollar.
Since becoming the President-elect, Mr. Trump has used whatever strong arm tactics he could to persuade some big-name manufacturers, such as United Technologies (maker of Carrier air conditioners), Fiat Chrysler, General Motors, Ford Motor, Toyota Motor, to re-direct their future capital spending away from Mexico and towards the US instead. In turn, within the $5.1 trillion a day foreign currency markets, the US dollar has risen the most against Mexico’s peso, up 21% since Trump was declared the winner of the US presidential election on the morning of Nov 9th. Against the Euro, the US dollar is up a much lesser 3% and is up 8% against Japan’s yen. In mid-December, the US dollar was up as much as 12% and briefly reached as high as 118.50.
This post was published at FinancialSense on 01/19/2017.
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