Trump slump: Dollar sinks to four-month low and Dow Jones heads for longest losing streak since 2011 on reflation trade doubts
The dollar plunged to a four-month low and US equities came under heavy selling pressure as investors lost confidence in Donald Trump’s ability to deliver on his ambitious economic agenda, after Friday’s healthcare reform defeat.
In a stunning setback, the US President failed to rally enough support from his own Republican party to repeal and replace Obamacare, which was billed as his first major test since taking office in January.
The dollar index, which hit a 14-year high in early January, sank below 99.0 for the first time since November 11, two days after Trump’s presidential victory. The dollar weakness lifted the pound across $1.26 against the US dollar for the first time since February 2, while the euro surged to a four-month high of $1.09.
Meanwhile, the Dow Jones was nursing triple digit losses, of 169.94 points, at the opening bell. The Nasdaq and the S&P 500 opened 53.7 and 20.34 points lower, respectively.
However, US stocks came off session lows in late trading as investors picked up beaten-down stocks. Despite more than halving its losses in late trade, the Dow Jones remained on track for an
eight-day losing streak, its longest since August 2011.
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