- Dollar's strength under fresh attack ahead of the weekend
- European Union, China accused of currency manipulation
- But there is little Trump can do to stop the Dollar's ascent say analysts
- Seperately, Trump threatens to tariff all China's imports
Ed Note: for the impact on markets that Trump's attack has had check out ZeroHedge's "Dollar Tumbles As Trump Blasts China, EU "Currency Manipulation", Fed "Tightening"
US President Donald Trump has fired another salvo in what appears to be the start of a potential currency war by accusing the European Union, China, and others, of artificially massaging their interest rates and currency lower.
"China, the European Union and others have been manipulating their currencies and interest rates lower, while the U.S. is raising rates while the Dollar gets stronger and stronger with each passing day - taking away our big competitive edge. As usual, not a level playing field," Trump tweet at 13:43 B.S.T.
The tweet sent the US Dollar lower allowing the Pound-to-Dollar exchange rate the chance to stage a climb back to 1.3062, having been below 1.30 just 24 hours earlier. The EUR/USD exchange rate menawhile rose 0.45% on the day to reach 1.1707.
The tweet builds on an earlier attack by Trump on the Dollar's strength when he said in an interview he is “not thrilled” by the Federal Reserve’s ongoing interest rate hikes which are providing the key underpinning to a stronger US Dollar.
The Fed came in for another mention via a 1:51 P.M. tweet that came hot on the heels of that accusing the EU and China of manipulating their currency:
"The United States should not be penalized because we are doing so well. Tightening now hurts all that we have done. The U.S. should be allowed to recapture what was lost due to illegal currency manipulation and BAD Trade Deals. Debt coming due & we are raising rates - Really?"
The message from Trump is that the stronger Dollar is unattractive to him as he tries to improve the USA's global trade performance, and the Fed is partly responsible.