The US dollar hit a seven-week low as traders continue to react to Donald Trump's protectionist trade stance.
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by Abi Moses on 26th January, 2017
Trump has officially withdrawn The United States of America from the Pacific Rim Trans-Pacific Partnership (TPP). The move has distanced The United States from its Asian allies, specifically the 11 remaining members of the TPP.
Trump has also signaled his intent to renegotiate the NAFTA – the current North American Free Trade Agreement between America, Canada and Mexico. Trump said "NAFTA is the worst trade deal maybe ever signed anywhere, but certainly ever signed in this country"
It is accepted that the weakened Dollar is a signal of uncertainty rather than negativity, with many experts admitting they have no idea how Trump's moves will affect the market in the long-term. Sue Trinh, head of Asia FX strategy at Royal Bank of Canada in Hong Kong admits "it's now just watching and waiting, with headline risk, to see Trump's first 100 days as we get greater clarity around his policies and around his cabinet, all of those are likely to inject greater volatility into the market."
The weakening of the Dollar has however resulted in the strengthening of many other currencies. Even the Pound has fared well against the Dollar, despite its own Brexit-shaped problems. The Yen has been one of main benefactors of the Dollar's struggles, making it a focus for many Forex traders.
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