Dollar price drops for fourth day after G20 Summit

Market - Vinay Mishra - Mar 20,2017

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dollar price drops for fourth day after g20 summit

Domination of the Trump administration's policy of protectionism in the G20 summit leads to plunge in the dollar price for the fourth day in a row against the basket of currencies.

The dollar fell for the fourth day in a row against prominent currencies used to measure its strength. This comes as a reaction to the US policy of economic nationalism in the G20 summit.

The US dollar index (DXY), a measure of the US currency against a basket of global peers has continued its extended losing streak to a fourth session, the longest streak since early November, just before the US presidential election. The DXY is now down by 0.1 per cent to 100.21, earlier hitting a five week low of 100.02.

Other important currencies such as yen, euro and pound sterling were not changed much. The Australian dollar is at $0.7687, down by 0.16 percent.

Also, the US Federal Reserve had recently raised the interest rates.

The annual conference of 20 finance ministers ended on March 18, failed to draft new measures that would satisfy the US. Trump’s administration opted for just a brief reference for strengthening trade in their statement.

For some G20 members, the denial of the US to commit itself to a stronger free and open trade marked the beginning of a dangerous trend in global economy. For others, agreeing to exclude tougher language was an indication of big clashes coming ahead within the US administration over its economic nationalism and it is not important to stage a conflict over the issue so early under Trump’s presidency.

G20 finance ministers and central bankers passed a mild pledge to keep global trade free and open, accepting to an increasingly protectionist United States after a two-day meet.

The idea behind Trump administration's protectionist bent includes the imposing of a new round of tariffs and taxes on imports which are expected to support the dollar in the global scenario.