Trump Wouldn’t Influence the USD [Would]

The USD is becoming the world’s focus as the consequences of its rise are being felt everywhere.  We wrote yesterday of its impact on emerging markets and recently here about China, Russia and Japan selling off US Treasuries.

Yesterday we saw news of Russia dumping even more, down to an 11 year low at just $14.9b.

From Business Insider yesterday:

“Elvira Nabiullina, the head of the Central Bank of Russia, said the reduction was due to an assessment of financial, economic, and geopolitical risks, RT reported. Nabiullina said the gold purchases were helping to diversify Russia’s wealth.

Padhraic Garvey, the global head of debt and rates strategy at ING, said that for Russia it was like “moving from a safe asset to an ultra-safe asset.”

Russia has been buying large amounts of gold as it continues to sell US Treasury bonds, recently overtaking China as the world’s biggest holder with $US80.5 billion worth, according to Russia’s central bank.” 

Turkey too has now halved their US Debt holdings, dropping from $62b a year ago to just $32.6b.  

Yesterday China’s Yuan continued its plummet adding yet more pressure to the USD in the middle of a trade war.  Remember, a lower domestic dollar is better in a trade war… Not something the instigator of said trade war likes to see….

The US President is not supposed to try and influence the US Fed, just as our PM is not supposed to influence the RBA’s rate decisions.  Central Banks are supposed to be independent autonomous bodies.  You may have noticed that the US President however does always play by the rules.  [Sorry, we’ve changed that to ‘doesn’t’ – ‘does’ was misinterpreted and was fake].  Last night in an interview he expressed his disapproval at the Fed hiking rates, forcing up the USD and he doesn’t like that:

“I’m not thrilled….because we go up and every time you go up they want to raise rates again….I don't really...I am not happy about it. But at the same time I’m letting them do what they feel is best….But I don’t like all of this work that goes into doing what we’re doing.”

And then further clarifying that he’s not really trying to influence…

“Now I’m just saying the same thing that I would have said as a private citizen….So somebody would say, ‘Oh, maybe you shouldn’t say that as president. I couldn’t care less what they say, because my views haven’t changed….I don’t like all of this work that we’re putting into the economy and then I see rates going up,”

But of course, well, you can guess what happened…

And for an ‘unrelated’ giggle on a Friday: